11 Mar 2015
EUR/USD: No end in sight to the bear run
FXStreet (Bali) - EUR/USD made yet another fresh 12-year low at 1.0667 after gunning through stops below the 1.0690 level, extending losses for 9 days in a row, with the exception of the little pause seen last Monday.
The bear on Tuesday move was not data driven this time, and it seems to continue being fueled by a market that is expecting early Fed rate hikes (mid year bets growing). Also worth noting that big specs had been buyers along 1.11/1.12 levels, so the need to bail out their longs at liquidity levels, coupled with ongoing capital outflows on ECB rates policy from the Eurozone and the recent stance by option players to sell volatility, which tends to result in directional markets, are all factors fueling the bear trend.
Jim Langlands, Founder at FXCharts, notes: "Further losses now look possible, and having broken 1.0750, there does not appear to be too much support until we hit 1.0550, where a support line connecting the Oct 2008/June 2010 lows currently sits (monthly chart below) which is roughly where the base of the multi-year channel comes in and should therefore be strong support. On the topside, 1.0750 will again see offers ahead of 1.0800 although it looks unlikely to be troubled today, but above which, the first Fibo resistance is at 1.0853 (23.6% of 1.1378/1.0693)."
The bear on Tuesday move was not data driven this time, and it seems to continue being fueled by a market that is expecting early Fed rate hikes (mid year bets growing). Also worth noting that big specs had been buyers along 1.11/1.12 levels, so the need to bail out their longs at liquidity levels, coupled with ongoing capital outflows on ECB rates policy from the Eurozone and the recent stance by option players to sell volatility, which tends to result in directional markets, are all factors fueling the bear trend.
Jim Langlands, Founder at FXCharts, notes: "Further losses now look possible, and having broken 1.0750, there does not appear to be too much support until we hit 1.0550, where a support line connecting the Oct 2008/June 2010 lows currently sits (monthly chart below) which is roughly where the base of the multi-year channel comes in and should therefore be strong support. On the topside, 1.0750 will again see offers ahead of 1.0800 although it looks unlikely to be troubled today, but above which, the first Fibo resistance is at 1.0853 (23.6% of 1.1378/1.0693)."