Forex FX: Euro/Dollar Analysis Update For 20th November 2012
(Forex FX 4X analysis update – 19th November 2012)
- Sentiment overview - Euro zone policy makers could be set to give the go-ahead for the disbursement of an essential loan to Greece on Tuesday, worth around 44 billion euros according to Reuters.
- Equity markets experienced gains for the second daily session in a row, on optimism that a deal could be reached to avoid the so called “Fiscal cliff”. The S&P500 is currently trading around 1.5% higher on the day with the euro and S&P 500 highly correlated over recent sessions. UK FTSE +2.4%, German DAX +2.5% & Spanish IBEX +1.7%.
- Our weekend EUR/USD analysis noted that price was essentially trading within the 1.2660 – 1.2800 consolidation range, between the 100 – 200 period period SMA levels on the daily chart. We also noted that a weekly higher close had also formed, following the three previous lower closes.
- Euro/dollar today moved back above last weeks high, testing the 1.2800 – 30 previous support lows and 200 day SMA. The move above the previous 1.2800 high, from last week, marks a higher low around 1.2690 (Fridays low) and a 0.5% daily gain.
- A flight to perceived safety and associated dollar rally remains as a corrective risk. Nonetheless, the U.S. dollar was struggling versus other key currencies today, dropping versus most currency counterparts during early trading, with commodities likewise higher and gold seeing a +1.06% daily gain..
- In related pairs we note the EUR/GBP is trading back at the retest of the highlighted trend line around 0.8050 at +0.40% (see figure 2). EUR/JPY is trading at a +0.63% daily gain.
- Our key focus heading into the 20th November trading sessions is on how the EUR/USD price action develops around the 1.2800 – 1.2830 area potential resistance level.
EURUSD D1 (figure 1)
EUR/GBP D1 (figure 2)
Forex-FX-4X: Euro/Dollar Forecast 20th November