EUR/USD Sep. 8 – Weber Contributes to Downfall
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EUR/USD Sep. 8 – Weber Contributes to Downfall

EUR/USD took a hard hit on the fresh news about the European debt crisis and deteriorated sharply. It ranges lower. Will it lose the critical support line? Here is a quick update on technicals, fundamentals and community trends.

eur usd forecast

EUR/USD broke below two uptrend support channels. Click to enlarge.

EUR/USD Technicals

  • Asian session:  Busy session, with Euro/Dollar trying to recover and rise above 1.2722 and failing.
  • Current Range is between 1.2665 to 1.2722.
  • Further levels: Below,  1.2610, 1.2460, 1.2330 and 1.2150.  Above   1.2770, 1.2840, 1.2930, 1.30, and 1.3110.
  • Uptrend channel broken: EUR/USD traded in an uptrend channel. Uptrend support began from the lows it reached on August 24th through a low on August 25th. Uptrend resistance began on a swing high on August 24th and was formed on August 26th. After losing it, EUR/USD returned to this range, and even tested the top limit with a swing move to 1.2855 – exactly at uptrend resistance.
  • Secondary channel broken: The uptrend resistance is the same as in the main channel, but the uptrend support is closer – began only in September. The pair lost this line and is way below.

EUR/USD Fundamentals

All times are GMT. Most important events emphasized.

  • 6:00: German Trade Balance. Exp. 12.8 billion. Actual 12.7 billion. OK.
  • 7:45: ECB member Axel Weber spoke. Said there are still fears of double dip recession. Negative for Euro.
  • 10:00: German Industrial Production×¥ Exp. +1.1%.
  • 18:00: US Beige Book.

EUR/USD Sentiment

  • The reason for the big collapse – European banks hid the real valuation of sovereign debt in the stress tests. Their problems are apparently much bigger.
  • Market is drifting between “risk on” and “risk off” with a tendency to “risk on”. With “risk off”, good US figures boost the dollar and bad ones hurt it. When risk is on, bad US figures boost the dollar. In recent days, we’ve seen more normal behavior.
  • The 1.2610 line is critical on the downside.
  • News from Ireland and Spain regarding debt will impact the Euro.
  • Currensee Community: 57% are Short, 43% are long, up from 56:44 yesterday. These are 937 open positions in real accounts trading this pair at the moment.

Want to see what other traders are doing in real accounts? Check out Currensee. It’s free..

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.