The EURUSD is rebounding after an early NY move to new lows for the day.
A quick summary for the pair:
- The current day’s trading range for the pair is 93 pips. The 22 day average (about a month of trading) is 96 pips.
- The low has reached 1.1753. The next low target comes in at 1.1743. The 1.1743 was the level that the euro was introduced to world financial markets as an accounting currency on January 1, 1999 – replacing the ECU at a ratio of 1:1 (US$1.1743). See post: Forex technical trading: EURUSD keeps the bears in control. Moves away from 2010 low.
- Factory orders for Germany were much weaker than expectations (CLICK HERE)
- Retail sales were better at 0.6% vs 0.2% est,(Eurozone retail sales Nov mm +0.6% vs +0.2% exp), but PPI was weaker at -0.3% vs -0.1% est (November 2014 eurozone PPI -0.3% vs -0.1% exp m/m)
. Confidence numbers for the EU today were mixed (December 2014 Eurozone consumer confidence final -10.9 vs -10.9 exp)
The Longer term look at the EURUSD
I kinda think the 1.1743 level is a key level for the pair. The price of the EURUSD spent most of the post 1999 time below this level. In November 2003, the price moved above the level and there has not been a closing month below it since (a total of 10 trading days has closes below the level in November and December of 2005). With the EURUSD range near normal, if there is a dip toward that level – say after the Initial claims – look for buyers.
Of course going forward the US employment report looms large tomorrow. The market is expecting another solid number of 240K which highlights the strong US/weak EU fundamental trend. As a result, the rallies today should be limited. Close resistance will be eyed against the 38.2-50% of the last trend leg lower in the EURUSD at the 1.1779-87. The 100 bar MA on the 5 minute chart will also be eyed. A move above these levels will neutralize the bearishness a bit for today at least.
The move lower today has been pretty steady. The price is also moving further away from the 1.1876 level which was another key level. It was the post 2008 crisis low and therefore, a key line in the sand for me (see: Forex trading education: Ask yourself “Where should we not go?”). If the trend is to continue lower for the EURUSD, this level should be a lid for the near term.
Claims up next.. Key 1.1743.
EURUSD 5 minute chart.