21 Nov 2013
EUR/USD: bearish engulfing day, no buying participation so far
FXstreet.com (Barcelona) - EUR/USD printed a major bearish reversal signal on the daily, with failure to hold above 1.35 leading to an aggressive 160 pips rotation from highs to lows, ending the US session depressed at 1.3435, near day lows.
EUR hit by perfect bearish storm (again)
Today's EUR bearish move will be remembered as one of those 'perfect bearish storm days', as the currency was hit hard from two different front. Firstly, headlines from Bloomberg suggesting that the ECB is weighing a move to -0.1% in deposit rates should more easing be needed - further defying the ECB's north vs south conflicting views on policy stance - meant time to liquidate EUR longs. Then, a dovish FOMC minutes did the the rest, as Fed reminded to the markets it might consider starting to reduce its bond purchasing program in ‘coming months.’
EUR/USD sellers take control after bearish engulfing day
Technically speaking, the turnaround in fortunes in favour of EUR/USD bears appears to have further room to go, with Wednesday's bounceless fall being reminiscent of the same low conviction to participate as EUR dip buyers seen during the 1.3830-1.33 decline from late October. Further supporting the risks of a market prone to start selling strength again is the fact that the EUR buyers failed at the key 55/20-day MA, broken trendline from July lows and Kijun line on the daily (50% fib).
Fundamentals underpin further losses
According to Adam Button, US-Lead Editor at Forexlive: "With talk about negative rates this move has a fundamental underpinning. It’s tough to sell after a 100-pip fall but the fundamentals and technicals are aligned and a touch of hawkishness from the Fed could spell another decline. Look to sell any bounces."
Jamie Coleman, US-Lead Editor at FXBeat, notes: "Lately, every dovish ECB-inspired sell-off has been short lived. Usually we get a quick dip followed by a V-shaped recovery. Not today."
EUR hit by perfect bearish storm (again)
Today's EUR bearish move will be remembered as one of those 'perfect bearish storm days', as the currency was hit hard from two different front. Firstly, headlines from Bloomberg suggesting that the ECB is weighing a move to -0.1% in deposit rates should more easing be needed - further defying the ECB's north vs south conflicting views on policy stance - meant time to liquidate EUR longs. Then, a dovish FOMC minutes did the the rest, as Fed reminded to the markets it might consider starting to reduce its bond purchasing program in ‘coming months.’
EUR/USD sellers take control after bearish engulfing day
Technically speaking, the turnaround in fortunes in favour of EUR/USD bears appears to have further room to go, with Wednesday's bounceless fall being reminiscent of the same low conviction to participate as EUR dip buyers seen during the 1.3830-1.33 decline from late October. Further supporting the risks of a market prone to start selling strength again is the fact that the EUR buyers failed at the key 55/20-day MA, broken trendline from July lows and Kijun line on the daily (50% fib).
Fundamentals underpin further losses
According to Adam Button, US-Lead Editor at Forexlive: "With talk about negative rates this move has a fundamental underpinning. It’s tough to sell after a 100-pip fall but the fundamentals and technicals are aligned and a touch of hawkishness from the Fed could spell another decline. Look to sell any bounces."
Jamie Coleman, US-Lead Editor at FXBeat, notes: "Lately, every dovish ECB-inspired sell-off has been short lived. Usually we get a quick dip followed by a V-shaped recovery. Not today."