The EURUSD is moving higher today, although it is at a slower pace to the GBPUSD’s move (i.e. EURGBP is indeed lower), it is advancing. The TLRTO miss today of 82.6 B euro (below the low end of the extreme) on the first go around should lead to the fast track of euro-QE option (how ever that manifest’s itself through ABS or buying of government debt). The bullet was fired and it missed. With funds virtual being given away for up to 4 years at below market rates, one would have thought the max would have been taken but balance sheet issues and low loan demand (or low loan confidence) seems to be the problem. This is not good news for the ECB.
The EURUSD has traded most of the time above the 1.2914 over the last 10 days. The Yellow is the Neutral Zone. The Red is attempts lower that have failed. Can we stay in the Red?
The pairs move lower yesterday, did take the price below technical support levels from the string of lows seen over the the last 9 days of non trending trading. Some of those levels have been taken back in trading today with the price moving above the low from last week (and the year) at 1.2858, the low from last Wednesday at 1.28825, the from last Thursday at 1.2895.
Looking at the last 10 days from a different angle, the price of the EURUSD has spent most of the time above the 50% the range at the 1.2914 (Green Zone in the chart above). The Yellow Zone, represents a number of lows where the price bottomed. The Red Zone represents the failed breaks lower – with the current move “To Be Determined”.
This current move into the Red Zone has been longer, it has gone lower and so far, the correction has gotten into the yellow zone but only briefly. Staying below is still bearish but it is being pulled by the GBPUSD bullishness today (or so it seems). A move into the Green Zone will be a worry. It will muddy the water for the sellers.
Test time for the sellers. Let’s see if the price can stay in the Red Zone.
