The Advisor Weblog

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EUR/USD ahead of ECB Posted: 06 Oct 2011 02:23 AM PDT Today's ECB meeting, will be important, not only because market expectations regarding latest economic policy, yet also because is the end of Mr. Jean Claude Trichet mandate. Up to now, and despite not his favorite roll, he managed to kept euro zone away from collapse, with emergency measures. But those measures, particularly the purchases of troubled governments' bonds, mean long-term risks for the bank's credibility. And the collapse is not that far away: Greece default is still pending like a Damocles' sword above EU head. This week however, the Euro is finding support in EU authorities talk about coordinating measures to recapitalize banks. Barroso announced just now that they are proposing coordinated actions, but no details come out yet, not an explanation on how they will do it. Reading news, here and there, Bloomberg says: "Investors betting against the euro- area surviving its debt crisis in one piece may be overlooking one thing: the will of politicians to hold it together. German Chancellor Angela Merkel is intensifying her defense of the currency. French President Nicolas Sarkozy says there's no alternative to channeling aid to Greece without risking the kind of cataclysm set off by the 2008 collapse of Lehman Brothers Holdings Inc." However, and despite the politicians will, won't be an easy road. The euro zone, will have to fight long with this crisis, and as said before several times, is just starting. Anyway! EUR/USD is higher today, breaking above the 76.4% retracement of this year bullish run. Still early to say, a weekly close above this 1.3370 area, could favor further gains in the pair with the 61.8% of the same rally at 1.3670. Daily chart holds the bearish tone, so if we lose back the 1.3300 area, the pair will likely resume its bearish trend.     Short term talking, 4 hours chart has a very shy bullish tone, as per price above 20 SMA and momentum heading higher above 100 level, showing no much strength right now. Resistances for the upcoming hours come at 1.3410, 1.3460 and the 1.3500 area. Supports at 1.3310, 1.3260 and 1.3200. This posting includes an audio/video/photo media file: Download Now

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