EUR/USD took a hard hit on the fresh news about the European debt crisis and deteriorated sharply. It ranges lower. Will it lose the critical support line? Here is a quick update on technicals, fundamentals and community trends.
EUR/USD broke below two uptrend support channels. Click to enlarge.
EUR/USD Technicals
- Asian session: Â Busy session, with Euro/Dollar trying to recover and rise above 1.2722 and failing.
- Current Range is between 1.2665 to 1.2722.
- Further levels: Below,  1.2610, 1.2460, 1.2330 and 1.2150. Above  1.2770, 1.2840, 1.2930, 1.30, and 1.3110.
- Uptrend channel broken: EUR/USD traded in an uptrend channel. Uptrend support began from the lows it reached on August 24th through a low on August 25th. Uptrend resistance began on a swing high on August 24th and was formed on August 26th. After losing it, EUR/USD returned to this range, and even tested the top limit with a swing move to 1.2855 – exactly at uptrend resistance.
- Secondary channel broken: The uptrend resistance is the same as in the main channel, but the uptrend support is closer – began only in September. The pair lost this line and is way below.
EUR/USD Fundamentals
All times are GMT. Most important events emphasized.
- 6:00: German Trade Balance. Exp. 12.8 billion. Actual 12.7 billion. OK.
- 7:45: ECB member Axel Weber spoke. Said there are still fears of double dip recession. Negative for Euro.
- 10:00: German Industrial Production×¥ Exp. +1.1%.
- 18:00: US Beige Book.
EUR/USD Sentiment
- The reason for the big collapse – European banks hid the real valuation of sovereign debt in the stress tests. Their problems are apparently much bigger.
- Market is drifting between “risk on†and “risk off†with a tendency to “risk onâ€. With “risk offâ€, good US figures boost the dollar and bad ones hurt it. When risk is on, bad US figures boost the dollar. In recent days, we’ve seen more normal behavior.
- The 1.2610 line is critical on the downside.
- News from Ireland and Spain regarding debt will impact the Euro.
- Currensee Community: 57% are Short, 43% are long, up from 56:44 yesterday. These are 937 open positions in real accounts trading this pair at the moment.
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