Forex Technical Update
Although price action was bearish heading into the 6/5 US session, it failed to clear below 1.24, and built more momentum toward short-covering. Over the 6/6 Asian-European session, we saw the USD lose across the board, but the EUR has not attacking as aggressively, most likely because the market was awaiting the European Central Bank's (ECB) meeting and press conference at 7:45AM EDT and 8:30aM EDT respectively.
The bank held the benchmark interest rate at 1.00%, dispelling rumors of a rate cut.After the press conference that began at 8:30AM EDT, the euro, as well ask risk in general was stalling. The ECB did not give much new ammunition, sticking to their guns, now shifting the hope of resolution on the shoulders of the European Politicians.
EUR/USD 1H chart 9:45AM EDT 6/6/2012
The 1.2440 area was resistance in early US session in the previous session, and we are seeing it act as support. If the market can hold below 1.2485 pivot throughout the US session, we are likely to head down toward the 1.24 pivot. Below that, we would open up 1.23, which is near last week's low established immediately after the Non-Farm Payroll release on Friday (6/1).
The next key risk factor for the EUR/USD will be Bernanke's statement tomorrow. Janet Yellen might drop some early clues today at about 7:00PM EDT, and the Beige book comes out at 2:00PM EDT. More speculation on QE will likely give the EUR/USD some support ahead of Bernanke's testimony tomorrow (6/7) at 10:00AM EDT.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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