The European unit saw its 1.2950 barrier, which had been defended in full force since the 300+pips range was first established in early Feb, being cracked around the time of the highly liquid overlap btw the European and American trading sessions.
The immediate reaction was a 40+pips bear run which found its bottom at 1.2910, followed by a typical pullbak towards 1.2970 only to be snapped back down to 1.2930 again, current price. On the day, EUR/USD lost 0.53%.
Finally, it seems as though the market is in the midst of a technical see change, reinforced by the negative fundamental developments in the Greece this week.
Fundametals and technicals appear to finally align equally solid to see further losses. Besides, an extra indication which should not be overlooked was the timing of the break lower, as it came at a time of powerful liquidity, suggesting most markets participants had a 'say' on the break into new trend lows. Spanish 10-year yields surging above 6.00 also weighed.
A battle between bottom 'feeders' and top 'pickers' has officially begun and according to Dean Popplewell, OANDA’s resident currency analyst, this time around, there seems to have been a change in trader sentiment and attitude towards the EUR to when it last visited levels below 1.2900/50 in early January.
Dean notes: “This time there seems to be an equal amount of bottom 'feeders' and top 'pickers' according to OANDA's position diagram, suggesting there is no real saturation of shorts to limit the EUR’s downside. One can expect the bottom pickers stops to be eventually triggered, adding fuel to the EUR’s existence debate.”
Mr. Popplewell adds: “Technically, there are offers into the 1.30 expiry that are slowing any drift higher and keeping the stop-losses in that handle intact for now. The rumors of Middle-east offers are helping to cap any upward general movement."
On the downside, with 1.2950 out of the way, "the daily chart shows the next pivot being around 1.2870. This area was support on 12/29, then resistance 1/13, and support again 1/20 and 1/23. With consideration of a bearish market development, any bullish outlook from this pivot should be limited to 1.30. If the market indeed holds below 1.30, our bearish outlook might not be over. The 1.2625-1.2670 2012 lows could be in sight" explains Fan Yang, technical strategist at FXTimes.
The immediate reaction was a 40+pips bear run which found its bottom at 1.2910, followed by a typical pullbak towards 1.2970 only to be snapped back down to 1.2930 again, current price. On the day, EUR/USD lost 0.53%.
Finally, it seems as though the market is in the midst of a technical see change, reinforced by the negative fundamental developments in the Greece this week.
Fundametals and technicals appear to finally align equally solid to see further losses. Besides, an extra indication which should not be overlooked was the timing of the break lower, as it came at a time of powerful liquidity, suggesting most markets participants had a 'say' on the break into new trend lows. Spanish 10-year yields surging above 6.00 also weighed.
A battle between bottom 'feeders' and top 'pickers' has officially begun and according to Dean Popplewell, OANDA’s resident currency analyst, this time around, there seems to have been a change in trader sentiment and attitude towards the EUR to when it last visited levels below 1.2900/50 in early January.
Dean notes: “This time there seems to be an equal amount of bottom 'feeders' and top 'pickers' according to OANDA's position diagram, suggesting there is no real saturation of shorts to limit the EUR’s downside. One can expect the bottom pickers stops to be eventually triggered, adding fuel to the EUR’s existence debate.”
Mr. Popplewell adds: “Technically, there are offers into the 1.30 expiry that are slowing any drift higher and keeping the stop-losses in that handle intact for now. The rumors of Middle-east offers are helping to cap any upward general movement."
On the downside, with 1.2950 out of the way, "the daily chart shows the next pivot being around 1.2870. This area was support on 12/29, then resistance 1/13, and support again 1/20 and 1/23. With consideration of a bearish market development, any bullish outlook from this pivot should be limited to 1.30. If the market indeed holds below 1.30, our bearish outlook might not be over. The 1.2625-1.2670 2012 lows could be in sight" explains Fan Yang, technical strategist at FXTimes.
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