6 Feb 2014
Flash: EUR/USD remains a short-term momentum game - FXStreet
FXStreet (Barcelona) - Goncalo Moreira CMT, FXStreet Technical Analyst notes that EUR/USD was able to come off lows courtesy of Mr. Draghi's speech and is currently soaring past the .36 figure.
Key Quotes
“This reaction is still contained within a down sloping channel stuffed with a lot of price instability formed during the thin markets in December. Another bout of risk liquidation would take the EUR/JPY down, contributing to the EUR/USD sell off.”
“When comparing today's liquidity distribution with the one from a week ago, new sell orders appeared on the way to the .35 figure when the Euro was being beaten down by momentum sellers. Some of these short-term players have certainly taken profit before the weekend, or latest before the ECB announcement. It's reasonable to infer that many of the stops from those sellers are now removed, ruling out the likelihood of a stop cascade rally.”
“Possible sell zones accordingly to our Trading Positions table, are clustered near the 1.37 plateau. Some of these orders may be relieved buyers closing at break even. Considering how fast today's trajectory has been and the imbalance thereby created, the .3650 could represent an extenuation level and reward those offering liquidity.”
Key Quotes
“This reaction is still contained within a down sloping channel stuffed with a lot of price instability formed during the thin markets in December. Another bout of risk liquidation would take the EUR/JPY down, contributing to the EUR/USD sell off.”
“When comparing today's liquidity distribution with the one from a week ago, new sell orders appeared on the way to the .35 figure when the Euro was being beaten down by momentum sellers. Some of these short-term players have certainly taken profit before the weekend, or latest before the ECB announcement. It's reasonable to infer that many of the stops from those sellers are now removed, ruling out the likelihood of a stop cascade rally.”
“Possible sell zones accordingly to our Trading Positions table, are clustered near the 1.37 plateau. Some of these orders may be relieved buyers closing at break even. Considering how fast today's trajectory has been and the imbalance thereby created, the .3650 could represent an extenuation level and reward those offering liquidity.”