Trading strategy: small short at 1.2860, stop at 1.2920 (0.5% risk), 1st objective at 1.2810, 2nd objective at 1.2730
The dollar rose across the board before the stress test results will be released in Europe. Euro’s slide to $1.2735 between the 50% and 61.8% retracement levels of 1.2522-1.3028 seems corrective as it managed to recover some ground and is orbiting around 1.2770. Short-term sentiment remains bullish although momentum is weaker. In order to regain strength, confirming that uptrend resumed, a break above 1.2900 is needed. I doubt much upside action is likely until Friday afternoon when the stress test results will be published. Meanwhile, downside pressure will probably remain high as long as 1.2860/00 caps the upside. Current exchange rate is 1.2766 @06:08 GMT
Support: 1.2715/35, 1.2685/00 and 1.2600 Resistance: 1.2850/60, 1.2920, 1.3000/25 and 1.3100 Market sentiment: long term – bearish, medium term – slightly bearish, short term – bullish, intra-day – bearish
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