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Despite the weak US jobs report, EUR/USD has lost some of its charm. Uptrend support is at risk, the chance for another round of QE is not that certain anymore, the failure to break higher and more, all make it vulnerable. Here goes:

  1. Uptrend support is at riskEUR/USD fell towards this strong line that accompanied it for over a month. Volatility around the Non-Farm Payrolls  could sent it below this line.
  2. QE2 at risk: FOMC member Bullard said that deciding on new quantitative easing steps (QE2) isn’t a done deal. This could wait for the next meeting as well.
  3. German Trade Balance came out worse than expected – the surplus was only 11.7 billion instead of 12.3 that was expected.
  4. The failure to break above the all-important psychological level of 1.40 shows that this is finally a tough barrier that the Euro finds hard to handle.
  5. Exhaustion: After running 10% higher in one month, with very brief stops, EUR/USD could take a break. So can other currency pairs that partied on the US dollar.
  6. Strong Euro has a price: weakening the European economies – the rise comes with a price – Europe is less competitive. An ECB member, Nowotny, already warns that this rise is bad for the recovery.

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