EUR/USD Technical Update – Price Action Analysis – 2nd January 2013
- From a sentiment perspective, recent developments in the US have been supportive for risk and high beta currencies so far today, as the House of Representatives approved a bipartisan deal to raise taxes for high earners, thus avoiding the so called ‘fiscal cliff’.
- On the back of the above the EUR/USD currency pair has been trading near the recent range resistance highs, threatening a sustained break above the weekly inside bar, but still below the 1.3307 peak level which marks the 19/12/12 bearish pinbar/doji high.
- Any sustained break above the highs has the FE100 expansion of 1.2661 > 1.3125 > 1.2875 as a possible resistance focus area (see W1 chart below), this is located around the 1.3337 area. A move above this point has a prior resistance cluster around 1.3380 as a potential trouble area.
- A key EUR/USD area we would be monitoring on any extended upside is the the 50% corrective retrace and 1.3500 round number confluence level.
- Any failure to sustain above the 1.3300 area highs brings the risk of a reversion to the recent 1.3180 – 1.3300 range trading, with any sustained downside bring the 1.3125 and 1.3000 areas back as technical points of interest.
- In related markets, we note that cable has taken out recent range highs above 1.6300 and moved as high as 1.6380, GBP/USD is currently around 0.47% higher on the day as significant volatility was seen on a break of the 1.6310 area – before price subsequently consolidated lower. EUR/GBP found resistance around 0.8150 and is near flat on the day after giving back earlier gains.
- The price of gold is trading up around 0.70%, AUD/USD is trading at a 61.8% retrace level just under 1.0500 (up almost 1% today) and the USDX (dollar index) is lower on the day and trading around the 79.40 area.
EUR/USD D1 Chart – 2nd Jan 2013
EUR/USD W1 Chart – 2nd Jan 2013
EUR/USD analysis, charts, forecast, outlook and news for 2nd Jan 2013.