Trading strategy: standing aside

The euro is having a break and pulls back from recent top as the dollar strengthened on concern that the global economic recovery is stalling boosted demand for safer assets, such as the Yen. Euro's decline below 1.3200 to test last week's interim bottom around 1.3130 suggests further weakness as long as upside pullbacks will find resistance into the former support zone, around 1.3200. In case of break below 1.3130, next region where support may emerge is 1.3000 - also a psychological barrier.

Short-term sentiment remains bullish and current pullback is probably a corrective move. A recovery above 1.3200 is needed to confirm that uptrend resumes, hence providing a buying opportunity. Until then, more downside action is in the cards as weakness may spread into the European and US trading sessions. The Nonfarm Productivity followed by the FOMC Interest Rate Decision and Statement are the most important events in the economic calendar today. Current exchange rate is 1.3150 @06:08 GMT

Support: 1.3100/30, 1.3050 and 1.2970/00
Resistance: 1.3200, 1.3330/50, 1.3400 and 1.3500
Market sentiment: long term - bearish, medium term - slightly bullish, short term - bullish, intra-day - bearish


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