A very interesting development in the EUR currency complex overnight. Despite the obvious turmoil in Europe and the Moody’s ‘outlook negative’ ratings change for Germany the EUR has hung very tough. Could Putin’s reaffirmation of the Eurozone as an investment destination have been a catalyst (surely not enough on its own?) or has the EUR bashing simply reached a zenith for now?
Whatever the reasons the chart displays are warning of a change.
Exhibit 1 – The EUR/USD. Despite extreme bear news the EUR/USD is displaying caution in the down move.
Exhibit 2 – The EUR/AUD. The pair has been trending lower for 1300 points in almost a straight line. However, in potential confirmation of the EUR/USD chart above, the EUR has traced out a key day reversal against the AUD. The two chart developments together strengthen the idea that EUR selling may be exhausted.
I’ll be buying a dip in the EUR/AUD with a stop loss against the low and watching the next 24 hours for confirmation of the EUR/USD doji.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities