EUR/USD 8th & 9th August 2006

Wednesday 9th August 2006

EUR/USD daily report

The dollar recovered some of its recent losses on yesterday due the FOMC market reaction. During the high volatile hour following the news release, the Euro advanced towards the 1.29 area piercing the resistance at 1.2870 failing to establish a breakout then declined and orbited around 1.2830, a minor support established before the news release. Overall, it's been a mixed reaction to the news even though the dollar extended its gains by the end of the day. It seems that the Euro is on a recovery process at the time of this writing, advancing North by 55 pips already since the Asian session open. We will see later if this is a full recovery or a short term retracement.
Resistance is now formed by 1.2830 followed by 1.2870 and 1.2900. Support is seen at 1.2800 backed by 1.2770 and 1.2745. A break of 1.2830 may encourage a later test of 1.2870, though it may be a good level for short entries in case of a reverse (being the 50 fib of the 1.2890-1.2770 recent move) but it looks too risky while the upside areas like 1.29 are still favored if looking on the daily charts. Current quote is 1.2823

Recommended trades:

Long in the 1.2820-30 area if 1.2830 won't hold, stop below 1.2800, objectives at and above 1.2870.



Tuesday 8th August 2006

EUR/USD daily report

After establishing fresh highs on Friday by testing the 1.29 resistance level on the NFP release, the Euro declined on yesterday and resumed the decline during today's asian session testing bids into the 1.2810 area. Lookin on the daily charts we notice that the upside is still favored and while the market holds above the mid 1.27 we expect new tests of 1.29 in order to exit the range and resume the upward move towards 1.3. Support is seen at 1.2800 backed by 1.2770 and 1.2745. Resistance starts at 1.2830 followed by 1.2870 and 1.2900. Large moves are possible today due FOMC policy announcement in the US later. Current quote is 1.2822.

Recommended trades:

Long in the 1.2790 area, stop/reverse below 1.2760, objectives at 1.2870. Secondary objectives may aim above 1.29 in case of a 1.2870 break.