EURUSD: Euro shorts cleaned out, more upside to come? by FX Charts

EUR/USD: 1.1488
After doing very little for much of the session, the US$ has undergone a major selloff against most of the majors since NY got in, allowing the Euro to take out plenty of resistance levels in reaching a high, so far, of 1.1530.Another sharp rally in oil prices and a big miss in the US factory orders, as well as a more conciliatory tone from the Greek PM & Finance Minister, with regards to negotiating the outstanding debt repayments, all contributed to the sell off in the dollar. Earlier, the main Eurozone data of the day was ignored, this being the EU PPI which fell -0.4% mom, -2.7% yy in December (vs exp -0.7% mom, -2.5% yy).

Technically, both the short term and the daily indicators now point to the chance of further gains for the Euro, and with the market running short and being squeezed we could yet see the session high’s being taken out. If so, then above 1.1530 would see a run towards the nearby Fibo resistance at 1.1542 (76.4% of 1.1679/1.1097) beyond which would see a run up towards 1.1600 and on to 1.1655 (38.2% of 1.2569/1.1097). If seen, such a rally should be seen as a sell opportunity with a SL left on all short positions to be left above the 21 Jan high of 1.1680.

On the downside, there will be plenty of shorts looking to cover today, and bids are going to be seen at minor Fibo supports at 1.1430 (23.6% of 1.1097/1.1533) and then at 1.1365.

It looks like being a volatile run in to the NFP on Friday, with today’s EU Retail Sales, US Non Mfg ISM and the ADP Jobs data being the focus. Overall, I think the Euro is sill heading lower but for the time being we may need a bit more of a cleanout before the decline can continue.

Economic data highlights will include:

Non-Monetary Policy ECB Meeting, EU Retail Sales, ADP Employment Change, US Services/Composite PMI, ISM Non-Mfg PMI.

Meta Trader – AxiTrader EUR/USD: 4 HourDXY



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