The Euro gained strength overnight after it was reported that Germany’s jobless numbers fell less than economist estimates. The market reacted as if the number was bullish instead of just slightly lower than the pre-report guess. Technically the Euro found support last night slightly in front of last week’s bottom at 1.2587. It rallied when U.S. stocks opened higher and sentiment shifted toward risk.
At 9 am CDT the Euro topped following a better than expected Consumer Confidence Report. The actual number of 53.5 blew out the consensus figure of 50.0. The surprise nature of this number drove investors back into the Dollar. At this point the Euro broke from 1.2742 to 1.2680 before settling into a trading range.
After a quick rally to 1.2701, the EUR USD began to break following the release of the Fed’s Minutes from its last FOMC meeting. This market broke hard into 1.2661 as the report indicated that the Fed is ready to take appropriate action should the U.S. economy deteriorate “appreciably.” The willingness of the Fed to consider taking additional steps to provide more support if the economy weakens further drove traders into the safety of the lower-yielding currencies, thus weakening the Euro.
Technically the Euro is in a downtrend, but the recent sideways action has this market poised to move sharply in either direction. A break to the downside is likely to run stops under the last swing bottom at 1.2587 all the way to the Fibonacci level at 1.2433.
A breakout over 1.2779 will change the main trend to up and could ignite the start of a rally to 1.2960.
Local: 312-896-3930
Toll Free: 800-971-2440
Email: Info@BrewerFX.com
Website: www.BrewerFX.com
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.
