EURUSD Technical Analysis – 8th November 2012 Forecast
- The EURUSD rallied as high as 1.2875 earlier today (7th November) but subsequently found resistance at the prior support lows from last week. This came on the back of comments from European Central Bank President Mario Draghi, concerns around the so-called “fiscal cliff” in the US, and a swift deterioration in market sentiment which had the Dow Jones Industrial Average experience the worst trading day of the year.
- Anyone going long in anticipation of a reversion to the recent EURUSD range trading scenario could have been caught out by the sharp drop that followed after this support area became resistance.
- The move higher today will have taken out some of the weak shorts who got involved around the break under the 200 day SMA. We are not surprised to see this area marking the near term line in the sand for the bulls and bears, and await a clear price action signal here to gain a directional bias.
- The price structure area around 1.2750 (June highs), which is aligned with the 38.2% Fibonacci retrace of the July swing low to September range highs, has previously acted as a pivot and is currently seeing interim support.
- Any subsequent move lower and bearish continuation scenario, on safe haven dollar flows, could potentially see EURUSD support around the 1.2605 area, where the 50% retracement level and 100-day SMA converge (see figure 2).
- On the flip side, a daily timeframe close above this 200 day SMA could be a hint that a resumption of the near 1.28–1.30 or 1.31 range could possibly be ahead.
- In related markets, the US Treasury sold $24 billion in 10-year notes today (7th November) at a 1.675% yield on the broad based risk aversion theme, this is the lowest level seen since July. The Dollar Index has risen to a two-month high and touched a peak of 80.92, the highest since September 7th.
EURUSD Daily (figure 2)
Related terms: EURUSD Analysis, 8th November 2012, Forecast, Euro Dollar News, Report, Technical Analysis, Outlook, Trend. EURUSD Forex Currency, Markets Focus.