EUR crosses/EUR/USD

EUR/USD: Session outlook, favour selling rallies to 1.2740

     The downtrend is still very much in control on the short-term charts so selling rallies back to resistance areas around 1.2740 makes the most sense to me. Bulls will want a premium for entering the market ie a silly dip, in the absence of any basing formation. EUR/JPY has steadied after yesterday’s sell-off which was driven by real-money funds. This cross as always will determine the EUR fate during Asian trade and it’s outlook remains bearish in short-term whilst below 101.30. On a fundamental note, the large increase in Spanish inflation is also a worry as most social payments are index-linked and could lead to a big increase in outlays for an already overly indebted government.

  1. Sean, I think you are right. I also believe that many people have just given up trading this pair (eur-usd). (Feedback from the hedge funds, interbank market?) Its daily range is very narrow, however, usually the OCT-DEC period is the most volatile one in the year. Fundamentally the European situation is very bad. Euro should be dropping severely.

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