EUR/USD Weekly Outlook

EUR/USD continued to stay in sideway trading in established range last week without making any progress. Outlook remains unchanged. With 1.4537 minor resistance intact, such consolidative would extend further. Below 1.4258 minor support will flip bias to the downside for a falling leg towards 1.4054. Break will target 1.3837 support. Nevertheless, decisive break of 1.4537 will be first signal of up trend resumption and should bring retest of 1.4939 high first.

In the bigger picture, EUR/USD is still trading above medium term trend line support from 1.1875 (now at 1.3935) and thus, rise from there should still be in progress. Break of 1.4939 should confirm rally resumption and should send EUR/USD through 1.5143 resistance towards 1.6039 high. However, considering that weekly MACD has been staying below signal line for some time now, a break below 1.3837 will have the trend line support, as well as 55 weeks EMA firmly taken out.

Read the full article…

EUR/USD Weekly Outlook

EUR/USD continued to gyrate inside converging range of 1.3969/4939 last week and outlook remains unchanged. Price actions from 1.4939 could be developing into a triangle pattern. Hence, we’ll stay bullish as long as 1.3969 support holds and favors an upside bring out. Having said that, while another fall cannot be ruled out, downside should be contained above 1.3969 and bring rebound. On the upside, above 1.4441 will turn bias to the upside. Further break of 1.4695 will be the first signal of up trend resumption for another high above 1.4939.

In the bigger picture, EUR/USD is still trading above medium term trend line support from 1.1875 (now at 1.364) and thus, rise from there should still be in progress. We’d continue to favor the bullish case that correction from 1.6039 has completed with three waves down to 1.1875 already and. Above 1.4938 will target 1.5143 resistance first.

Read the full article…

ECB Delivered Upbeat Economic Outlook

While ECB maintained the main refinancing rate at 1%, the upbeat economic outlook was encouraging. President Trichet said in the statement that there’s ‘strengthening in economic activity in the second quarter of 2010′ while data for the third quarter are ‘better than expected’. The central bank continued to view the current key ECB interest rates remain ‘appropriate’ and ‘the risks to the economic outlook are broadly balanced in an environment of uncertainty’.

ECB’s bullish outlook on the region’s economy boosted market sentiment. At the press conference, Trichet noted that ‘Q2 seems to be really exceptional’. This signals that the GDP in 2Q10 may be stronger than Bundesbank’s prokection of +1.2% q/q made in June 2010.

For the third quarter, Trichet said ‘the available data for the third quarter are better than expected’ and ‘it is clear that the second half is likely to be less buoyant than Q2 which we expect to be particularly flattering’.

Read the full article…