EUR/USD Nov. 3 – Improving Positions Before Big Bang

EUR/USD managed to settle above 1.40, but is still struggling with resistance, hours before the long-awaited QEII decision. Here’s a quick update on technicals, fundamentals and community trends.

EUR/USD holding on to 1.40

EUR/USD Technicals

• Asian session:  EUR/USD traded in a narrow range between 1.40 to 1.4030
• Current Range between 1.3950 to 1.4030
• Further levels in both directions: Below, 1.3950, 1.3830, 1.37, 1.3637, 1.3530, 1.3430 and 1.3333.  Above  1.4030, 1.4217, 1.4450 and 1.4580.
• 1.4030 proved to be a strong line in the past, but EUR/USD couldn’t hold on to it.
• 1.3830 important line below.

EUR/USD Fundamentals

All times are GMT. Most important events emphasized.

• 12:30 ADP Non-Farm Payrolls. Exp. +21K.
• 14:00 ISM Non-Manufacturing PMI. Exp. 53.5 points. Important Hint for NFP on Friday.
• 14:00 Factory Orders. Exp. +1.3%.
• 18:15 QE2 Decision. One of the most important events of the year. The size of quantitative easing and the wording of the FOMC Statement will rock the markets for many days.

EUR/USD Sentiment

• As expected,  Republicans  won the House. This doesn’t have a significant impact on currencies. It was expected.
• Debt issues never went away, but the market disregards them. Note that the Greek prime minister said that debt might be restructured, creating anger within the European Union. Also Ireland is in trouble.
• The inevitable second round of quantitative easing in the US is a done deal, but will probably be of a lesser scale than thought earlier. A huge QE2 will send the Euro higher. A weak one will boost the dollar. Volatility will remain high for a long time.
• Currensee Community: 55% are short, 45% are long. More shorts than yesterday (52:48). These are 1131 open positions in real accounts trading this pair at the moment. Is the community seeing the dollar escape the bearish trend with QE2?

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