EUR/USD October 12 – Sliding Lower In the Aftermath of

EUR/USD is below the uptrend channel that characterized its trading for quite some time. It continues falling. Here’s a quick update on technicals, fundamentals and community trends.

EUR/USD below 1.40

EUR/USD Technicals

• Asian session:  Quiet session between 1.3850 to 1.39.
• Current Range between 1.38 to 1.3850.
• Further levels in both direcstions: Below,  1.38, 1.3717, 1.3650, 1.3560, 1.35, 1.3430.  Above   1.40 1.42 and 1.4450.
• Wide uptrend lost: Uptrend resistance began on Sep. 8 and uptrend support on Sep. 13. Trading is characterized with many hours of consolidation, followed by  few hours of sharp rises. Note that the uptrend support line was slightly modified. Support was lost yesterday.

EUR/USD Fundamentals

All times are GMT. Most important events emphasized.

• 6:00 German Final CPI. Exp.  -0.1%. Actual -0.1%.
• 14:00 US IBD/TIPP Economic Optimism. Exp. 46.7 points.
• 15:45 US FOMC Member Thomas Hoeing speaks.
• 16:20 ECB President Jean-Claude Trichet talks.
• 18:00 US FOMC Meeting Minutes released.

EUR/USD Sentiment

• Debt issues never went away, but the market disregards them. This could change this week, but in the meantime, the downgrade of Ireland hurt the Euro only for a short time.
• The inevitable second round of quantitative easing in the US still weighs on weakens the dollar, but the size of QE depends on the current situation and especially on jobs which disappointed on Friday. The meeting minutes will supply hints about QE2.
• Short positions on the dollar have reached an extreme of 30 billion. In such extreme levels, the question that arises – if everybody’s short, who’s left to sell? The dollar is already beginning to recover.
• The loss of the the uptrend channel is an important sign.
• Currensee Community: 54% are long, 46% are short, slightly higher from yesterday’s 52:48. These are 1127 open positions in real accounts trading this pair at the moment.

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