EUR/USD Fibonacci / Technicals

Discussion in 'Forex' started by nycfxproptrader, Apr 1, 2004.

  1. EUR/USD ran up to test
    the 38.2% fibo retracement of the 1.2925/1.2045 drop before stalling. Dealers
    are finding it difficult to get bulled-up on EUR/USD based solely on the lack of
    a rate cut from the ECB or any sign of one to come in the future. The best
    Trichet had to offer was that the ECB maintains an open mind. The market wants
    to see more, and may punish the EUR for the ECB"s intransigence. Fund managers
    have been voting with their feet for months, moving cash out of the Euro zone
    and into the US and Japan. This is likely to continue as reform grinds to a halt
    and the ECB stands pat, more or less guaranteeing underperformance.
    1.2400/10 is good resistance above the Fibo, with more at 1.2425. Would suggest
    selling rallies toward 1.2385/90 with a tight stop above 1.2410, looking to scalp 40-50 pips on dips
  2. I believe the ECB's decision was appropriate.

    The cure to Euro zone economy might lie at the reforms, not on a rate cut. ECB might cut the rates, but as long as reforms are slow in progress, the effect of lower interest rates might have been nullified, thus a waste in monetary ammunition.

    If interest rates is lowered, why would fund managers stay? With rate hike expectations loom large in U.S. and while ECB remains under pressure to ease the rates, it would be benecial to buy the dollar than to buy the euro, thus, fund managers would in fact, exit euro after all when ecb cuts the rates.

    I think it would be best to examine the reason/reasons behind lack of consumer confidence in Europe. It has been cited that higher expectation of inflation also held the consumers to spend. Poor progress in reforms surely had a negative impact on sentiment, too.

    I'm no economist, but that's what I think about ECB rate talk.

  3. sometimes work in in FX ?

    daily , hourly , or various ?

    I noticed the recent move from 1.1775 - 1.2060 ( approx )

    retraced some fibo #'s before heading higher on hourly charts