Technical Analysis

Trades at NY session highs

The EURUSD was under pressure in the Asian and London morning session.

That pressure took the price to and through a trend line. The break of the line, did not last long, however, and the trend line was reestablished.  The fall also failed to reach the 100 bar MA on the 4-hour chart and the 38.2% of the move up from the May 29th low.  Sellers could not keep the pressure on. 

The corrective move higher in the US session, has taken the price back above the 100 hour MA at 1.17503. That MA line is still moving higher which may give buyers some solace.  

Remember that it is Friday with G7 and central bank/geopolitical activity next week including a Fed rate hike and the potential for the ECB to start QE taper.  The US hike is a certainty. The ECB taper is a possibility. That should favor the USD but markets are tough.   

PS speculative longs remained high last week. We get the more recent commitment of traders report later this afternoon.  That could make rallies more difficult too.

Technically, the failure of the break below the trend line, and the move back above the 100 hour MA (and swing area – see red circles), do not favor selling now, but a break back below each would give the shorts/sellers more confidence.  

PSS Italy’s FTSE MIB is down 2.1% and trading at the lowest level in a week. Bank of Italy’s Visco said “Uncertainty on government measures halts investment”. The 10 year yield in Italy is up 3.2 bps at 3.091%.  Higher rates may also be a drag on investment/the economy. 

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