EUR/USD

EUR/USD intraday analysis November 5th

This is courtesy of Iridium and you can visit his website at chifbaw.com:

“Regarding EUR/USD, here are my recommendations today:

– Best: Buy EUR/USD at 1.2740 (Fibo 61.8%) with both short term (1.28) and long term profits (1.335) in mind PROVIDED the Greek parliament approves budget.
– Medium: Short EUR/USD on rallies at 1.289/1.2915 with S/L 1.2955, target 1.2850, 1.2740.
– Very Risky: Buy EUR/USD at 1.2830 S/L 1.2790, target 1.2870-1.29.

Analysis: The risk off reaction of the markets to the positive NFP numbers on Friday signals that Romney is a much more desirable president than Obama for the markets. Also the relatively low level of involvement of the market participants suggests a likely volatility boost once the election is over. We therefore expect short term further sell off if Obama is elected and a rally if Romney becomes president. With that said, the market will probably stay quiet till Wednesday. EUR/USD remains ambiguous since it did not close below the 200-day MA. Despite the sell off of Friday, we expect a mild correction this morning towards 1.2870-1.29. However, further declines seem warranted. The main risk for EUR/USD is the Greek parliament vote today. A positive outcome would be mildly bullish, while a negative outcome would be extremely bearish. Therefore any trading today must done with this potentially very dangerous event in mind.

Good luck and be careful.

  1. Iridium seems to be the only one who thinks markets shall rally on Romney win,every other article i have read says because of the Obama-Bernanke partnership,it wd instead cause a sell off in the markets(Usd Bullish) .Kindly indulge me sean.

  2. Hi Banya. My take is this, if Romney wins possible short-term USD spike esp USD/JPY as Romney win seen good for Wall Street therefore good risk sentiment. Might then see AUD/USD and EUR/USD higher on back of improved risk sentiment undoing USD gains? Medium term if Bernanke resigns early, then that should mean higher USD due to reduced QE? But rest of world likes Obama/Bernanke so that affect on USD sentiment must also be considered? As always, more questions than answers 🙂

  3. Yes indeed. It all depends on your time frame. If you look at a few days time frame, then my view remains that Romney is bullish for risk (more pro business, more pro Wall Street). If you look at 6 months time frame, then Romney is supposedly bullish for USD (less QE). However he is very likely to increase deficits and he can change his mind like a weathercock on any of his pledges!

  4. I also believe that Romney is going to win, I think his numbers are underreported. His win should be a HUGE plus for stocks (and quite substantially, if the House remains Republican too – the fiscal cliff will be solved very quickly). I don’t know how ear/usd is going to react. Because of the risk-on it could rally too, but the market may become too fearful that Bernanke is going to leave. Although, I think this fear is exaggerated. I think eventually European issues will decide its course.

Leave a Reply

Your email address will not be published. Required fields are marked *