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22 May 2014
EUR/USD keeps failing to gather momentum below 1.37
FXStreet (Bali) - EUR/USD once again failed to maintain losses below the 1.3680/90 support area, with heavy buying noted after the FOMC minutes, which preceded a new low hit at 1.3635.
Sean Lee, Founder at FXWW, reports "very heavy turnover overnight between 1.3635/50", adding "Goldman Sachs was the big seller down through 1.3650 and they ran into another big US bank which was buying on behalf of a series of big customers ahead of the 200-dma; the amounts were quite significant according to most reports; most banks had very heavy stops below 1.3630 and were surely getting trigger happy, but the bids held and then we had the relieving bounce."
Technically, Valeria Bednarik, Chief Analyst at FXStreet, wrote: "The hourly chart shows indicators aiming higher with RSI correcting oversold readings, with price approaching 20 SMA a few pips above current price. In the 4 hours chart the technical readings hold their bearish stance, albeit latest price behavior suggest current upward corrective movement may extend in the short term. So far, test of the 1.3640/60 critical breakout point has held twice. Third time a charm could happen if price remains capped below 1.3745 on recovery attempts."
There was also a juicy headline by Bundesbank President and Member of the Executive Board of the ECB, Mr. Weidmann, saying that no decision on ECB action in June has been taken. The comments comes against market expectations, with RBS representing the current market sentiment by noting in a client's questionnaire "with a broad and deep consensus that the Council will cut rates in June, attention is fast turning towards what comes next...." What if a move by the ECB is not the done deal the market think it is? If that were to be the case - judging by the comments makes one rethink -, there is certainly some important discrepancies between EUR price action, expectations and what could turn out to be the actual outcome.
Sean Lee, Founder at FXWW, reports "very heavy turnover overnight between 1.3635/50", adding "Goldman Sachs was the big seller down through 1.3650 and they ran into another big US bank which was buying on behalf of a series of big customers ahead of the 200-dma; the amounts were quite significant according to most reports; most banks had very heavy stops below 1.3630 and were surely getting trigger happy, but the bids held and then we had the relieving bounce."
Technically, Valeria Bednarik, Chief Analyst at FXStreet, wrote: "The hourly chart shows indicators aiming higher with RSI correcting oversold readings, with price approaching 20 SMA a few pips above current price. In the 4 hours chart the technical readings hold their bearish stance, albeit latest price behavior suggest current upward corrective movement may extend in the short term. So far, test of the 1.3640/60 critical breakout point has held twice. Third time a charm could happen if price remains capped below 1.3745 on recovery attempts."
There was also a juicy headline by Bundesbank President and Member of the Executive Board of the ECB, Mr. Weidmann, saying that no decision on ECB action in June has been taken. The comments comes against market expectations, with RBS representing the current market sentiment by noting in a client's questionnaire "with a broad and deep consensus that the Council will cut rates in June, attention is fast turning towards what comes next...." What if a move by the ECB is not the done deal the market think it is? If that were to be the case - judging by the comments makes one rethink -, there is certainly some important discrepancies between EUR price action, expectations and what could turn out to be the actual outcome.