Sep
6
2010
6
2010
EUR/USD Tests 8/18 Highs
The EUR/USD is testing 8/18 highs while still eyeing 1.30 as the Forex markets experience a relatively quiet trading session due to the Labor Day holiday in the U.S. However, activity should pick up during tomorrow’s Asia trading session with BOJ and RBA monetary policy decisions on the docket. Should the RBA give a positive outlook as we suspect this could help extend the rally in the risk trade and allow the EUR/USD to test its highly psychological 1.30 level. The data wire will be pretty quiet elsewhere, meaning optimism from Friday’s non-farm payrolls figure could spill into Tuesday’s trading session. However, we do notice some discouraging signs in that the Cable is not participating fully with the risk rally and investors are buying up the Yen again today. Hence, a sense of risk-aversion still lingers in the air and we suggest investors tread forward with cautious optimism. Regardless, the EUR/USD has made a notable recovery from August lows and it will be interesting to see whether the currency pair can manage to climb back above medium-term uptrend lines.
Technically speaking, the EUR/USD faces technical barriers in the form of 8/18 and 7/20 highs along with the highly psychological 1.30 level. As for the downside, the EUR/USD has supports in the form of 9/2 and 8/16 lows. Additionally, the psychological 1.25 level could serve as a solid cushion should it be tested.
Present Price: 1.2897
Resistances: 1.2899, 1.2914, 1.2929, 1.2947, 1.2958, 1.2970
Supports: 1.2882, 1.2868, 1.2852, 1.2833, 1.2802, 1.2786
Psychological: 1.25, 1.30
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Posted by: Matthew Myers
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