6 Jun 2014
EUR sees a powerful reversal - FXStreet
Vladimir Mihaylov, FXStreet Independent Analyst, reminds that EUR has tested 1.3500 after ECB rate cut yesterday, but then reversed quickly to the upside reaching 1.3670. The expert suggests that there are several reasons for such a hard to explain reversal.
Key quotes
"I think that this is because the market is expecting FED to make additional stimulus to the economic growth like ECB has done, this has put the dollar under downside pressure against all currency pairs and commodities. This is the main reason for the risk aversion yesterday, and the usual one is that this ECB move was expected."
"Technically we are far from the Daily Ichimoku and we need a correction to the upside. The correction move is now capped by 1.3670 but may extend to 1.3750-60 if that 1.3670 is broken."
"That is why yesterday i have given another SHORT entry point around 1.3760-70. I think the recovery to the upside is going to continue for today at least to 1.3735-40. Progress above 1.3800 is not impossible but i think it will be hard, at least we need a weekly close above 1.3760."
Key quotes
"I think that this is because the market is expecting FED to make additional stimulus to the economic growth like ECB has done, this has put the dollar under downside pressure against all currency pairs and commodities. This is the main reason for the risk aversion yesterday, and the usual one is that this ECB move was expected."
"Technically we are far from the Daily Ichimoku and we need a correction to the upside. The correction move is now capped by 1.3670 but may extend to 1.3750-60 if that 1.3670 is broken."
"That is why yesterday i have given another SHORT entry point around 1.3760-70. I think the recovery to the upside is going to continue for today at least to 1.3735-40. Progress above 1.3800 is not impossible but i think it will be hard, at least we need a weekly close above 1.3760."