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5 Jan 2015
EUR/USD settles circa 1.1950 after sub 1.19 collapse
FXStreet (Bali) - EUR/USD hammering through 1.19 bids came as heavy sell orders entered the market coinciding with retail platforms opening at 9 AM Sydney time, with stops triggered down to 1.1850.
After the flash bear action, a vigorous rebound took place, with EUR/USD now stabilizing circa 1.1950 as liquidity picks up. Acceptance by Germany that a potential Greece exit of the EZ is manageable, a sharp drop in EUR reserve holdings by central banks, and relentless buying dynamics in the US Dollar ahead of a much anticipated ECB sovereign QE announcement on Jan 22nd and a victory of an anti-austerity government in Greek's election on Jan 25th, are all factors being discounted by committed EUR sellers.
Technically, the level EUR/USD bounced off at 1.1850 or thereabouts represents a key horizontal support as per June 2010 bottom, which led to an spectacular 3,000+ pips bull run over the course of the next 12 months. Should bears clear the cluster of bids around this area, the next big target aimed at would be 1.1640/50, Nov 2005 low. On the topside, while a close of the down-gap towards 1.1980/1.20 is a viable scenario, expect grateful sellers near the big round number.
After the flash bear action, a vigorous rebound took place, with EUR/USD now stabilizing circa 1.1950 as liquidity picks up. Acceptance by Germany that a potential Greece exit of the EZ is manageable, a sharp drop in EUR reserve holdings by central banks, and relentless buying dynamics in the US Dollar ahead of a much anticipated ECB sovereign QE announcement on Jan 22nd and a victory of an anti-austerity government in Greek's election on Jan 25th, are all factors being discounted by committed EUR sellers.
Technically, the level EUR/USD bounced off at 1.1850 or thereabouts represents a key horizontal support as per June 2010 bottom, which led to an spectacular 3,000+ pips bull run over the course of the next 12 months. Should bears clear the cluster of bids around this area, the next big target aimed at would be 1.1640/50, Nov 2005 low. On the topside, while a close of the down-gap towards 1.1980/1.20 is a viable scenario, expect grateful sellers near the big round number.