The perennial ugly contest between the EUR and the USD is presently being shaded by the EUR which, despite ongoing Sovereign debt concerns, continues to find lots of buying interest. ACBs were significant buyers last week as was one large hedge fund on Friday night. Unless something changes, buying dips is the play here.
The technical picture looks bullish with a 3-wave retracement from 1.3862-1.3428 now complete, further gains in line with the bullish short-term trend are to be expected.
I’d look to play a 1.36/1.40 range over the coming weeks with a bullish bias but I’m also not afraid to sell ‘silly’ rallies as the fundamental position of the EUR is still highly questionable.
The hourly picture looks somewhat overbought and buying dips back towards 1.3560/1.3620 support band looks like a sensible play.