Quote of the day:“Do not condemn the judgement of another because it differs from your own. You may both be wrong.” – Dandemis
Good morning. The dollar losses more ground across the board on debt-ceiling fears, before the debt limit vote, as the market is pricing in the risk of downgrading the U.S. credit rating. Basically the euro is little changed against the dollar since yesterday morning – still trading near 1.4500 after finding intraday support at 1.4450. Interim resistance is formed into current trading range by this month’s open level, so a close above this level would be bullish on the monthly chart – where we can see a long tailed continuation candle suggesting there’s more upside in this pair.
I remain bullish on EURUSD in the short-term basis, but carefully monitoring it for signs of reversal at these high levels. Let’s not forget we’re comparing two of the worst-performing major currencies, so it’s only a matter of days or weeks in best case scenario, until all eyes will be back on Euro-zone’s problems – so we shouldn’t ask “which one of the two is overall better?” but rather “which one of the two is worse today?!”. It’s been like this for quite some time now and things won’t change. The Core Durable Goods Orders is one of today’s most important events in the economic calendar.
Trading strategy: looking to buy a small size on potential pullback to 1.4420, initial stop at 1.4360 (0.5% risk), target open
Support: 1.4450/60, 1.4400, 1.4330/50, 1.4250 and 1.4200
Resistance: 1.4500/30, 1.4600 and 1.4700
Market sentiment: long term – mixed, medium term – bullish, short term – bullish, intraday – bullish