The Advisor Weblog

EUR/USD intraday limited by 1.4380

Posted: 10 May 2011 03:29 AM PDT

Pair remains limited below 1.4380, and that should keep the downside expose at least in the short term:

Here are the details:

http://www.fxstreet.com/technical/forex-strategy/the-best-pair-to-trade-now/2011/05/10/

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Starting the day

Posted: 10 May 2011 02:11 AM PDT

Hi everyone and welcome! Markets are in better mood this week, as commodities are slowly regaining some of the lost ground over past week panic runs: oil is back above $ 100 a barrel, while gold quotes near $ 1515/oz, after falling near $ 1460 past Wednesday. Dollar gains then have remained limited against European rivals, while commodity currencies resume their bullish trend.

Euro and Pound however remain close to past week lows, as Euro succumbed to Greece financial jitters: since past Friday when rumors of Greece leaving the euro zone hit the market, not much more is taking investors attention. Restructuring debt, 60B more in aid, new bailout program, news are all about it. True Euro crosses are under pressure, particularly EUR/CHF, yet also true that EUR/USD has not even reached the 38.2% retracement (around 1.4140) of this year strong bullish run. Although now 1.49 seems far away, further loses are also limited in the cross: dollar has not much of a base to set a bullish strong case, considering the FED is still injecting money in the system with QE2, until June. Market may have priced in too much of a strength in the euro and rate hikes, and has now corrected. Consolidation and a clear break either above 1.45 or below 1.41 is needed now, to have a clearer long term picture. Euro may be weak, but dollar is still weaker.

Pound has gathered some charm these days as investors run away from Euro; but weakness in the UK currency continues limiting the upside, and pair continues finding its major support in market sentiment. Daily ascendant trend line coming from early January lies today around 1.6230, and unless below it, there is also not much of dollar strength in here.

Swissy and Yen have eased a bit from record lows losing ground against dollar, still far from confirming a reversal. USD/CHF and USD/JPY could extend their rises today, once above 0.8800 and 81.10, and not before.

Here is the link for today's calendar:

http://www.fxstreet.com/fundamental/economic-calendar/

Have a great trading day!