Stocks and Dollars

The pair has lost the traction after 1.3700 zone capped the four-day recovery from 1.3361, fresh eight-month low. Break below trendline support at 1.3560 and probe under 1.3520, yesterday’s low, marks over Fib 50% retracement of 1.3361/1.3689 upleg, now risks double top and further reversal. Next level stands at 1.3480,

At this point, we’re still favoring the case that rebound from 0.8529 is finished at 0.8795. Below 0.8651 minor support will bring deeper fall to retest 0.8529 first. Break will confirm resumption of whole fall from 0.9083. On the upside, above 0.8795 will in turn resume such rebound towards 0.8884

After the approval of the German vote to expand the European Financial Stability Facility (EFSF), the main focus is once again on fundamentals from the euro area to see how long will the slowdown continue.

The shock downgrade of New Zealand’s credit rating by Fitch not only made the number of countries with a triple-A rating one smaller today, but it also came as a rude reminder to the markets that economic strife is not wholly limited to the Eurozone. Greece’s woes and in turn

The tone as we start the European session is one of lethargy. European stocks have run out of steam and are following Asian stocks lower. It’s been one hell of a Q3, and the excitement of recent weeks is likely to continue over the next three months.

Despite this week’s initial brief fall to 101.95, as the single currency has rebounded from there and a hammer candlestick was formed on the daily chart, suggesting consolidation would be seen and test of this week’s high of 104.96 cannot be ruled out, however, break there is needed to signal

Germany successfully ratified the European Financial Stability Facility expansion yesterday with a very clear coalition majority for Merkel which gave the EUR and risk assets a brief bid initially. Following on from the German parliamentary ratification of the expanded EFSF (as agreed on the 21 July across the Eurozone) the

In the short-term the bullish momentum is likely to fade away and slowly turn into a bearish one, which is expected to drag the pair down to 1.3515 en route to 1.3428/1.3360. Further euro’s depreciation will lead the price even lower-to the level at 1.2860.