2012.11.12: Another trend line bounce?
Submitted on Mon, 12/10/2012 - 08:37
EUR/USDEuro seems to be losing more and more strength against the US Dollar, constantly making new lows and with all retracements reversing once they touch the down trend line drawn on the Hourly chart and seen in the picture below.
Technical OutlookEverything on our charts is pointing down, indicating that the pair is not ready yet to start moving up and more bearish movement is expected. Given the fact that 1.2700 is a round number and a possible rejection level, we are expecting a move up towards the trend line before the sellers will take back control. Like we said in our weekly outlook article, a touch of the 1.2830 Resistance level is possible during the week, but Monday is a slow day usually and a 130 pip move up is highly unlikely so any retracement should reverse from the down trend line. There is a possibility for price to move higher above the trend line and if this indeed does happen, we must be very careful not to get caught in a false break. All breakouts should be confirmed by strong candles and momentum on the higher time frames.
Fundamental outlookToday it’s bank Holiday for the USA and Canada and we expect the New York session to be a low volatility one, with little movement. The Eurogroup Meetings are held today in Brussels, attended by Finance Ministers of the Euro zone member states and the President of the ECB, Mario Draghi. The meetings are held during the day but are closed to the press; however, some of the attendants usually speak to the journalists and a statement may be released after the meetings are over.
GBP/USDAfter a consolidation period during last week, price finally broke out to the downside on Friday morning and continued in that direction throughout the day. The consolidation does not look like a picture perfect horizontal channel, but each time price tried to get out, it failed and returned inside the consolidation area: