EUR/USD 1H Chart 7/4/2012 10:22AM EDT
Previous: Forex Notes 7/4 – Markets Tentative Ahead of Holiday and Event Risks (7/3)
The EUR/USD drifted lower from 126.20 area during the 7/4 Asian and European sessions, as anticipated in the previous update. As we get into the July 4 Independence day lull in the US session, the EUR/USD has made a new low for the week, sitting at the 1.2545, 50% retracement level seen in the 1H chart. The currency pair has so far respected a declining trendline for the week, but is also respecting a projected support, which holds it in a declining wedge pattern.
The 1.2540-1.2550 area should provide support during the US session if the market continues to be in consolidation mode ahead of tomorrow’s Spanish 10-yr bond auction and ECB policy meeting/press conference. However note that the bearish consolidation in EUR/USD as opposed to the flat one in GBP/USD and the rising channel in AUD/USD, is due to the dovish expectation that the ECB will cut rates.
Still the downside for now should be limited to the 1.2520 pivot and 1.2513, 61.8% retracement level. The upside is probably limited as well in a low liquidity environment without much event risks during the 7/4 session.
GBP/USD 1H chart 10:30AM EDT 7/4/2012
Previous: Forex Notes 7/4 – Markets Tentative Ahead of Holiday and Event Risks (7/3)
The GBP/USD continues to be trapped in a range with resistance at 125.45. Support is shown by one pivot at 124.26. As the 7/4 US session progresses, the currency pair is sitting around 124.50, on the 200-hour simple moving average.
Over the 7/4 European session, we got UK Services PMI data, which indicated that in June, the service sector still expanded, but at a slower pace. The reading was 51.3 vs. forecast of 52.9 and previous reading of 53.3, so it was slightly disappointing.
Still, ahead of Thursday’s risk events, my theory is that the market will be respecting the range support, and push back toward 125.00 (middle of the range), if not the 125.45 range resistance.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.
