Article originally published on innerfx.com and republished here with permission
Quote of the day: “Get your facts first, and then you can distort them as much as you please” ~ Mark Twain
Good morning. The dollar continues to lose ground as risk sensitive currencies rebound after consolidating for a week. Short covering also fueled current recovery along with market optimism that European Leaders will act decisively – solving the region’s debt crisis. The final decisions about the Euro-area debt crisis is expected to be made at the Brussels summit on Wednesday.
According to latest COT data, bears are still around and are not impressed:
As seen below – the euro is aiming towards 1.400 where next resistance is formed. The “Risk On” game is likely to continue as Europe awaits decisions from Brussels summit.
The S&P500 COT chart is more interesting, as there’s a clear change in stance
Which means that dollar bears’ favourite asset is not the euro, but hey, it’s been like that for two years – and the reasons are obvious.
According to the COT data, the number of contracts is expected to rise towards September’s figures, as price is approaching 1.0500
Resistance around 80 is likely to be tested as the cross is still lagging behind AUDUSD, which is alread trading above recent highs. Looking for buying opportunities is probably the best bet right now
next support is seen at parity and we’re getting closer. Keep an eye on it…
Still unchanged as the range is intact, but I remain bullish as long as it holds above 1.2800, looking for new buying opportunities on the potential break above 1.2935/50