Monday’s glance at EURUSD.

We are about to experience less volatile and rather steady day on EURUSD chart. Euro didn’t react firmly on Saturday’s news stating that Ireland decided to take a financial aid, to support its banking system. Lack of firm movement on EURUSD may be caused by a fact that majority of traders already expected that European Union will not allow one of its members to become insolvent, hence this information was discounted in market. As there isn’t any significant U.S. data release planned on today session, solely ECB President Trichet Speak may turn out to be a weighty factor determining further short-term EURUSD movements. The highlight of Trichet speech may become a notification or just subtle indication or clue that interest rates are likely to change. On the other hand, languid reaction on Irish news may indicate that investors are biased toward Spanish or Portuguese issues being highly important and are generally bearish about Euro.
Glancing technically at EURUSD chart, current movement seems to be solely an upward correction in a long downward trend. Major resistances are 1.3820 and 1.3862 levels. Significant support level is a 50% retracement, level of 1.3438. Breaching this support will indicate that downward trend is about to remain. In line with bearish scenario on EURUSD is a fact that for last four days, volatility was constantly decreasing, thus correction is likely to burn out soon.

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