Tuesday November 9, 2010 - 14:37:14 GMT
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Forex Hound - www.forexhound.com
Euro Rebounds on Renewed Asian Interest; Ireland Debt Still Concern
The Euro rebounded against the Dollar after early session
weakness as Asian traders saw value and bought on the dips. The rally may be
short-lived however as selling pressure may return amid concerns about
peripheral Euro Zone debt.
During a choppy trading session, the Euro fell into an
uptrending Gann angle at 1.3838 before reaching its final bottom at 1.3823.
Fresh buying from Asia and the Middle East may
have stopped the slide, encouraging shorts to cover positions.
Traders may be turning bearish on the Euro because of
increased concerns over sovereign debt issues in peripheral countries in the
Euro Zone. The cost of protecting government debt against default in Ireland, Portugal
has risen substantially in the past week indicating fear and risk may be
After a strong rise in the Euro because of the Fedâ€™s
quantitative easing move, a more risk-averse environment may be forming,
favoring a rebound in the Dollar, strength in the precious metals and a
potential corrective break in equities and commodities.
Technically, the Euro is still in an uptrend on the daily
chart as long as the bottoms at 1.3698 and 1.3733 continue to hold. Overnight
the EUR USD found support on a Gann angle at 1.3838. The ensuing short-covering
rally may pull the market up to a retracement zone at 1.3698 to 1.3733. If this
market is topping, then sellers are likely to re-emerge in this zone, thus
forming a secondary lower top.
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