EUR crosses/EUR/USD

EUR/USD session outlook: Moody’s downgrade of French bonds will affect sentiment

The EUR has unsurprisingly fallen across the board after Moody’s downgraded French government bonds and their long-term economic growth outlook. This decision is likely to impact on the EUR for the rest of the morning although, with no major build-up of EUR longs in the market, its unlikely to have any lasting effect. There was some short-covering overnight in the EUR so we could see potentially see some of┬áthese┬ápositions reinstated if a bearish bias takes hold again. Moody’s are only following the lead of other ratings agencies so there should be no dramatic impact in terms of asset movements.

EUR/JPY will hold the key from here on to moves during Asian trade, and the closer we edge towards technical resistance at 104.80, the more magnetic it will become. EUR/USD should start finding intraday support near 1.2760/70 and its unlikely that the overnight highs at 1.2820 will now be overtaken, unless something unexpected happens in EUR/JPY.

  1. 45 pip range created in asian session. when was that last. oh yes i remember it was on that friday short covering morning and it was a brutal sell off after that.

  2. I am kind of surprised at this euro rally after the moody downgrade. Looks like there may be a nasty squeeze coming but this is geeting to be awful hard to figure this ou

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