EUR/USD

EUR.. The 1.3800 area was my target and now seen I believe will be hard to break above. If we do trigger stops at 1.3825 then the chances are that a sustained move to 1.3990 will follow despite offers at 1.3885 and 1.3940 respectfully.

Support now starts at 1.3740 followed by 1.3720 but below 1.3710 can see a fall to 1.3665 region. More stops at 1.3650 targets 1.3590 or even 1.3560 zone. Larger stops at 1.3545 expected.

EUR

the first full week of October starts as the last of September ended - with eurusd on a firm footing looking to push recent highs . It is clear that the trend is up , it is clear that the reserve manager community is very interested on any dip (due to local interventions ), and it is clear that the market is brushing aside all European concerns to concentrate on selling usd .

I cant really recommended anything other than the buying dips strategy that has been in force for a few weeks now , but I do have some concerns from here . The usd elsewhere is starting to show some signs of resilience (aud its labouring , cable looks toppy , usdyen support at intervention levels ) , and euro is fast approaching a raft of previous highs and resistance levels at 1.3850-1.3950 . The water is further muddied by the fact the market is actually starting to participate in this move and now I am starting to get a build up of stops lower within 100 pips .

For me I think we will have a couple of weeks of rangy whippy trading with a series of marginal new highs , often barrier related , being met with some sharper pullbacks within a 1.3550-1.3950 range . good luck one and all …

if Euro cross 1.3820, i belive the market will reach to its next resistance 1.4030

I am still holding my eurousd long psoiton. looking forward for the next comming top. [<3]

Any feedback?

Bourses built on a buoyant start to the day to post strong gains, giving up six days of losses.

Sentiment was boosted by strong service sector data from the US at 3pm London time.

The CAC climbed 82 to 3,731. The Dax has added 81 to 6,215 while Spain's IBEX rose 268 to10,651.

News that Moody's is considering another downgrade to Ireland's credit rating, due to increased uncertainty about the government's ability to preserve "financial strength", has had little impact so far. Moody's also praised Greece's efforts to sort out its finances, boosting Greek banks.

In France, and in fact all over Europe, much attention was focused on the plight of Jermome Kerviel, the former Societe Generale trader has been sentenced to three years in prison and ordered to pay back ?4.9bn (£4.2bn) for his role in a 2008 financial scandal that cost the bank billions of pounds.

In company news, travel firm TUI Travel went well after it allayed fears about full year trading by saying it is confident results will be in line with previous guidance.

Barclays Capital has upgraded Europe's stores to 'overweight' from 'market weight' as domestic demand may surprise on the upside suggests the broker.

But in other broker news, HSBC and Banco Santander have reduced their recommendations on German utility E.ON.

The eurozone composite PMI fell to 54.1 from 56.2 in August, but was slightly above an earlier estimate of 53.8. Any reading above 50 shows expansion.

However, European retail sales unexpectedly declined in August.

EUR/USD's break of 1.3791 suggests that recent rise has resume after brief consolidations. Intraday bias is back to the upside and further rise should be seen towards 100% projection of 1.1875 to 1.3330 from 1.2587 at 1.4024, which is close to 1.4 psychological level. Nevertheless, considering mild bearish divergence condition in 4 hours MACD, break of 1.3636 support will indicate that a short term top is formed and bring deeper correction first.

In the bigger picture, price actions from 1.6039 is a correction to long term rally from 0.8223 and could have finished with three waves down to 1.1875 already. Short term outlook will remain bullish as long as 1.3 psychological level holds and further rally should be seen to upper trend line resistance (1.6039, 1.5143, now at 1.4600) next. Break there will target a new high above 1.6039.

American fund real money has bought passively €200 mio against the $ within the last 1/2 hour

Yesterday I got clever and advised it and the result was like a marriage - good fun for a while then a world of pain and misery . Webber was very hawkish indeed and his view has be respected , the fomc minutes were then a touch on the dovish side and whilst they are very historical they proved enough to vault eur back above 1.39 to 1.3975 in asian time . I cant help but feel eurusd looks rich on a broad usd basis here , but with webber helping euro I cant fight it . Buying dips to 1.3910-20 looks the trade or on a clean break of 1.4030-40 , perhaps for me though eurgbp longs look better as the cleanest qe trade out there …good luck all ….

EUR/USD hourly – Break above 1.4012/30 required to confirm the resumption of the up-trend

* Having finally broken hourly Ichimoku-support and the last low at 1.3833 the market had opened the downside for a theoretical setback to key-support at 1.3500/1.3479 (int. 38.2 %) but by performing a strong recovery instead it looks as if the up-trend towards 1.4371 (76.4 %) has already been resumed. * Only a failure to clear 1.4012/30 (last top) would leave 1.3500/1.3479 in focus.

French finance minister Christine Lagarde Wednesday said that strikes and blockages are damaging France's image and risk harming the economic recovery.

Hundreds of filling stations ran dry this week after the country's 12 refineries halted production following strikes, part of nationwide protests against government pension reforms seeking to raise the legal retirement age in order to reduce future budget deficits.

The events subject France to material harm in the form of businesses losing orders and partial layoffs, Lagarde said. Its image abroad is also suffering, she added.

"Today we are losing an opportunity for France. We got through the crisis in better shape than others and we are picking ourselves up, rebooting growth and bringing unemployment down," she said on French television channel France 2.

"Losing that opportunity today [...] would be very serious," Lagarde said.

Lagarde also said that the government's plan to cut the public deficit next year by EUR40 billion is necessary to preserve France's sovereignty and independence.

EUR/USD daily – Triangle consolidation pattern still in play

* The results from the EU summit provided temporary support but 1.3998/1.4012 (int. 76.4 %/daily triangle) still needs to be cleared to confirm the resumption of the up-trend towards 1.4371 (76.4 %). * As long as such a break is missing, another corrective leg down towards 1.3581/60 (int. 38.2 %) can’t be excluded yet, what would be indicated below 1.3807/1.3756 (pivot/triangle).

This week will be a restless week for the market as the event calendar is packed with important economic releases including US payrolls on Friday and events including, US midterm elections on Tuesday and policy meetings of eight major central banks including RBA, RBI on Tuesday, Fed on Wednesday, ECB, BoE, CNB, BI on Thursday, and finally BoJ on Friday. Among the central bank meetings, the FOMC meeting will be on the center stage. We expect the Fed to commit to $500bn in asset purchases and keep its statement open-ended. This outcome should renew the dollar downtrend, but the glide path may not be as smooth as September to mid-October given the fiscal challenge confronting the winnder of mid-term elections.

Combining EURUSD, SP500 & Eurozone Spreads

Renewed trepidations emerge within the Eurozone as France and Germany press on for a new bail-out system that would put the onus on bond markets rather than taxpayers. Politicians are more supportive of the notion of debt restructuring, to the detriment of bond markets. ECB & Trichet won round 1 earlier this year when it forced member nations into establishing the €440 bln bail-out for Greece. But as the 3-year facility is set to expire, member-nation suggest debt rescheduling as a solution, in which case would escalate the risk of default and drive up bond yields. Yields rise in Portugal, Spain and Greece have all risen over the past 2 weeks, lifting Greek-German 10-year spreads to 4-week highs by 3%.

The top half clearly shows the highly correlated difficulty for both the EURUSD and SP500 to close above their 200-week MAs, while the lower half shows the notable (and simultaneous) rise in Portuguese, Greek & Spanish 10-year spreads relative to Germany.

The aforementioned dynamics illustrate a tug of war between the QE2’s negative impact on the USD, and the onset of a disappointing FOMC announcement on an already hesitant equity market. S&P500 has yet to close above its 200-week MA (now at 1195), which was last breached in 2008. Considering the 0.79 daily correlation between EURUSD and S&P500 (highest since January), FX traders cannot disregard the S&P500’s inability to break through 1195—a failure which will likely suggest EURUSD’s inability to break out of the $1.41-1.42 congestive resistance.