Forex: The EUR/USD knocks the bearish doors after printing third weekly loss in a row

Share | (San Francisco) - "We cannot argue that the EUR is consolidating the July/September rally any more," said in a recent report TD Securities' analysts Greg Moore and Shaun Osborne. And it's true that despite the EUR/USD closed on Friday its third downward week, the negative sentiment wasn't proved at all. But now, it seems the EUR/USD is knocking the bearish door definitely.

The euro closed the week trading quietly between 1.2700 and 1.2725 against the US Dollar after joining a hard battle for the 1.2740, which take the EUR/USD from 1.2790 in the Friday's Asian session to reach 2-month lows at 1.2690 just at the NY opening bell.

In this line, Osborne and Moore pointed that "this week's break through support in the low 1.28 area (200-day MA and the September/October range base) argues more strongly and obviously for lower EUR levels."

And TD Securities affirms that the 1.24 is now open. "The break out from the sideways range trade (a double top) targets a drop to the upper 1.24 area. A second weekly close below the 40-day MA supports the negative outlook now."

The weekly Commitments of Traders report shows that EUR shorts increases to 67K in the last week to Tuesday vs 58K in the previous one. So it seems the market is selling euros and, taking that the aggregate USD net short position continues to grind lower and now is the smallest net position against the USD since late August, buying Dollars.

As for short-term, Valeria Bednarik, chief analyst at recently commented that "immediate support and probable next target comes around 1.2650 price zone, while once below, next level comes at 1.2610, 50% retracement of 1.2040/1.3170. The upside now, should remain capped by 1.2740 price zone".

Wall Street closed mix focusing on Fiscal Cliff

The stocks rallied in the beginning of the session on hopes that President Barack Obama would say anything relevant in his speech on economic conditions and fiscal cliff, but after speech investors were trading on defense expecting long talks.

President Obama invited congressional leaders from both majority parties to the White House next week to start negotiations on economic and fiscal issues according to his speech on late Friday.

The DJIA fell 0.06% on the day, or 7.99 pts to 12,803.33. The Dow lost 2.12% on the week. The S&P 500 advances 0.17%, or 2.34 pts to close at 1,379.85. In the week the S&P close 2.43% down. The Nasdaq recovered the 2,900 line after gaining 0.32% or 9.29 pts to close at 2,904.87. In the last 5 days, the Nasdaq Composite declined 2.59%.

The week Ahead

As Richard Lee commented in a recent report., "a look ahead to next week's economic release schedule shows the potential for plenty of market moving opportunities." So here are 5 events that investors wouldn't want to miss.

1. Eurogroup Meeting (Nov 12)
2. UK Consumer Price Index (Nov 13)
3. US Retail Sales Report (Nov 14)
4. FOMC Meeting Minutes (Nov 14)
5. Eurozone Gross Domestic Product (Nov 15)

Finally, the's big banks, brokers and independent experts forecast poll has been just launched and it is pointing that the 84% of the pool shows bearish forecasts for the EUR/USD.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Forex and Currencies

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As of 4/23/2014, 10:41 AM