Friday February 11, 2005 - 09:59:31 GMT
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Forex Morning Meeting - European Session, 11/2/2005
Good morning everyone from FXstreet.com. The Crude oil is trading around the $47.1 level, proving the $45 level (50% fibo retracement level from the previous upleg $41-$49+) a tough support and looking poised for a renewed attempt to the $50 resistance. In the US stock markets, the Dow Jones Industrial Average surged to close around 10.750, even though the trade deficit number didnít meet expectations and the rise in crude oil.
Forex Technicals at a glance
Euro/Usd : At the time of this writing, the pair is trading around the 1.2865 level. Pair surged yesterday after a first negative reaction to the US trade deficit number, but it didnít even get close to the downtrend line which lays today around 1.2925. Unless that trendline is broken, I can only favour short positions around it and around the 20 and 50-day moving averages (to make it clear for those who watch this report, I use (on a daily basis) the simple moving averages). However, I will be very closely monitoring how the single currency behaves in coming sessions, because I see a bullish signal coming from the Indicators Watch Level 2, and it means that the aforesaid break canít be ruled out. If we take the move from 1.2250 to 1.3650 to draw fibonacci retracement lines, we will also see that the pair reacted to the upside at its 61.8% retracement level.
Moving averages overview : EUR has its 200-day moving average today at 1.2572. We have a bearish cross from the 2 shorter moving averages for some time now, with the 20-day down the 50-day.
Indicators watch : Indicators watch-level 1 (signal generator): EUR Neutral. Indicators watch-level 2 : EUR Positive.
Gbp/Usd : At the time of this writing, the pair is trading around the 1.8695 level. Similar to the EUR, it spiked up after yesterdayís news, but didnít manage to move above the 20-day moving average nor to break the current downtrend line, which today lays around 1.8820. However, besides having the Indicators Watch Level 1 signaling long for the pair, a re-test of the trendline and an eventual break of it canít be ruled out. What this also means is that if the current signal is a false one, we will almost for sure see the 1.85 level to break and the test of at least the 200-day moving average magnet.
Moving averages overview : GBP has its 200-day moving average today at 1.8420. We have the 20-day moving average cross the 50-day on the down for some time now. Pair is below both of them.
Indicators watch : Indicators watch-level 1 (signal generator) : GBP Positive (signaling long today). Indicators watch-level 2: GBP Neutral.
Usd/Chf : At the time of this writing, the pair is trading around the 1.2085 level. It is currently managing to hold above the current uptrend line from the lows of around 1.13. If it is finally broken, we look for a re-test of at least the 1.20 level. Pair has its Indicators Watch Level 2 pointing for further weakness in the pair, but the current USD bullish momentum may halt bears expectations, unless trendlines begin to break to the downside.
Moving averages overview : USD has its 200-day moving average today at 1.2226. The 20-day holds above the 50-day after the bullish cross a few days ago. Pair is trading above them both.
Indicators watch : Indicators watch-level 1 (signal generator) : USD Bullish (signaled long on december 30, 2004). Indicators watch-level 2: USD Negativel.
Eur/Gbp : At the time of this writing, the pair is trading around the 0.6885 level. More or less range-trading in no-manís land, and unless either 0.6850 or the 20 & 50 moving averages are broken we may well be seeing this uncertainty for some time.
Moving averages overview : pair has its 200-day moving average at 0.6822 today. We have a bearish cross from the 2 moving averages and pair is trading below them both.
Indicators watch : Indicators watch-level 1 (signal generator) : EUR negative (signaled short on january, 10). Indicators Wacth-level 2 : EUR Neutral.
Indicators watch-Level 1 : Trend indicators Direction, providing some useful investment information.
Indicators watch-Level 2 : Momentum Indicators Direction (working in pairs), providing current market sentiment for the instrument.
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