Monday April 4, 2005 - 09:13:39 GMT
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Forex Morning Meeting - European Session, 4/4/2005
Good morning everyone from FXstreet.com. The Crude oil closed around $57.55 yesterday, making new highs on th way, but its indicators are turning bearish again and we could have bearish signals soon. In the US stock markets, the Dow Jones Industrial Average closed around 10.400, sliding down after the worse-than-expected NFP number, but holding the 10.375 level for now.
Forex Technicals at a glance
Euro/Usd: At the time of this writing, the pair is trading around the 1.2885 level. The “disappointing” NFP number lifted the pair up to 1.3050+ levels, where a great selloff took place. Longs were caught in a bear’s trap and look quite in danger despite today’s pause in the downmove. Intraday trades profited from the economic data, but mid-long term trades supported by weekly indicators jumped in and took a good deal of dollar longs, provoking the second attempt to clearly reverse the long term trend. In my opinion, the long uptrend from 2002 is almost done and the confirmation will come on the break below the 200-day simple moving average, which is quite close to current levels.Since there are no relevant economic news due out today, I would expect the market to be quiet and digest Friday’s action before new rallies start. Also note the 2 shorter moving averages almost crossing south, another bearish signal. The bearish view is negated if the pair trades above 1.32 again.
Moving averages overview: EUR has its 200-day moving average today at 1.2770. Pair is trading below the 2 moving averages (20&50), though they still hold a bullish cross despite they are turning south and look poised for a bearish cross soon.
Indicators watch: Indicators watch-level 1 (signal generator): EUR Negative – no signal (flat). Indicators watch-level 2: EUR Neutral.
Gbp/Usd: At the time of this writing, the pair is trading around the 1.8735 level. Pair went up very modestly after the NFP number on Friday, signaling its lack of strength to continue north. A good sell-off followed that warning signal, and now the pair looks very weak with the 2 moving averages almost crossing south today. The 200-day simple moving average looks a reasonable support area now. Only a break above the 1.90 level negates this bearish view.
Moving averages overview: GBP has its 200-day moving average today at 1.8586. Pair is below both moving averages now and they look poised for a bearish cross soon.
Indicators watch: Indicators watch-level 1 (signal generator) : GBP Negative – no signal (flat). Indicators watch-level 2: GBP Neutral-Negative.
Usd/Chf: At the time of this writing, the pair is trading around the 1.2050 level. Very solid upmove taking the pair to a key test of the 200-day moving average, which is only 15 pips away from the current price. As said in previous reports, the USD/CHF is acting as the leading fx pair for some weeks now, and it looks to continue this way in the near future. The break of the long downtrend from 2001 is now confirmed, and the break of the long moving average (a reality now) will confirm it. Closing above 1.23 confirms also the 1-2-3 bullish formation on the pair, targeting much higher levels. Moving averages look poised for a bullish cross in the very near coming sessions. The brarish view on the pair is highly unrealistic now, only a break below 1.14 would start it.
Moving averages overview: USD has its 200-day moving average today at 1.2068. Pair is above both moving averages now and there is an inminent bullish cross.
Indicators watch: Indicators watch-level 1 (signal generator): USD Positive - no signal – (flat). Indicators watch-level 2: USD Positive.
Eur/Gbp: At the time of this writing, the pair is trading around the 0.6875 level. There still is a bullish cross by the 2 shorter moving averages, but pair has tested (and hold) the 200-day moving average, which, coupled with the strong support level 0.6850 have halted the downmove on the pair. However, only a move above 0.6940/50 resumes the upward momentum, therefore picture is pretty mixed on the pair right now.
Moving averages overview: pair has its 200-day moving average at 0.6867 today. Pair is on a bullish cross by the 2 moving averages now.
Indicators watch: Indicators watch-level 1 (signal generator): EUR Neutral. 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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