WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Euro/Dollar

Posted by Joseph Trevisani on Mar 18, 2013 12:37:00 PM


The euro ran through stops over the overnight highs to test 1.2994 before retreating. The market seems to credit selling  euro rallies, and did so even before the Cyprus bank tax was announced over the weekend.

Those who sold overnight below 1.2911 got squeezed in US action as the unusual 150+ point opening gap (Friday close 1.3072, Asian open 1.2911) has been about half filled to today's high so far of 1.2994.The market adage that 'gaps will be filled' is based on the complete lack of price action through a price gap, so that when the market returns to the empty levels there  are no orders or interest to stem the run and it usually proceeds until encountering normal order congestion, in this case above 1.3080.  Tilting against a full return to Friday's closing levels is the potential fundamental damage to the united currency from a bank run in Cyprus or the failure of a Cypriot bank.

Stops are thought to be gathered above 1.3000 for a return to 1.3080. On the downside there is strong support at the 200-day moving average and at 1.2850-80. The euro has been above 1.2880 since mid-December. Today's low was 1.2881. If resolution of the Cyprus issues prompted a relief rally back to last weeks level's the euro would likely remain under pressure because of the poor state of the EMU economy.

 

Joseph Trevisani

Chief Market Strategist

WorldWideMarkets

 

WWM Flash Trader

eur resized 600

 

Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

FAQ CenterLEARN MORE >>
Browse our frequently asked questions and find your answers right away.

VideosLEARN MORE >>
Access to the educational lessons, webinars and platform walkthroughs.

READY TO TRY THE MARKETS?

Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!