EUR/USD Jan. 3 – Losing the Hot Air

EUR/USD started the year with losing the hot air it enjoyed at the end of 2010, and dropping to a lower range. Volume is still thin, but we already have some fresh indicators. Where will it go? Here’s a quick update on technicals, fundamentals and community trends.

eur usd forecast January 3

Euro/Dollar now falling to lower range.

EUR/USD Technicals

  • Asian session:  Thin volume sent the pair down on a Sunday gap.
  • Current Range between 1.3267 to 1.3334.
  • Further levels in both directions: Below  1.3267, 1.3180, 1.3080,  1.30, 1.2920, 1.2722, 1.2587.  Above   1.3334, 1.3576,  1.37, 1.3786,  1.3950 and 1.4030.
  • 1.3080 important support below
  • 1.3440 is important resistance above and remains as such after a breakout attempt failed.

EUR/USD Fundamentals –

  • 9:00 European Final Manufacturing PMI. Exp. 56.9 points.
  • 15:00 US ISM Manufacturing PMI. Exp. 57 points.
  • 15:00 US Construction Spending. Exp. +0.2%.

* All times are GMT.

For more events later in the week, see the EUR/USD forecast.

EUR/USD Sentiment

  • Thin volume continues to characterize the markets, but this will end during this week, and the real forces will return for a new and wild year.
  • Portugal has a bond auction this week – many eyes are on it, and some speculate it will be the last domino.
  • Spanish bond yields have stabilized at high levels, around 5.50%. This stability is with us for over a week.
  • Europe has a lot of debt to pay back in 2011, probably above 1 trillion euros. This could evolve into a full blown “credit crunch 2” crisis.
  • Currensee Community: 50% are long , 50% are short. These are 1209 open positions in real accounts trading this pair at the moment.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.