For the last couple of weeks the Euro has fallen strongly away from the resistance level at 1.34 back to below the support level at 1.32 and in doing so traded to its lowest level in seven weeks very close to 1.31. However in the last 24 hours it has reversed strongly and surged back through 1.32 and within reach of 1.33 before easing back to 1.3250 in recent hours. Despite a couple of rallies back above 1.32 throughout last week, it has continued to drift lower and fall below 1.3150 although it finished last week with a short surge back towards 1.3180. For about a week or so a couple of weeks ago the Euro was placing upward pressure on the 1.34 level however it stood firm. A few weeks ago the Euro made a run at the 1.34 level only to be turned away yet again and ease back under – this has been the story for the last month. Several weeks ago it retreated heavily from above 1.34 after having reached a six month high around 1.3450. Despite its persistent attempts to push through the 1.34 level, it has only been consistently repelled with ample supply.
Looking at the bigger picture the Euro has spent most of the last six weeks or so trading within a range between 1.32 and 1.34. Back in early July the Euro was content to maintain the level above 1.31 and settle there, as it received solid support from both 1.30 and 1.31. On a couple of occasions it made an attempt to move within reach of the longer term resistance level at 1.32 and finally it finds itself trading on the other side of this level and being well established there. It has been some time since the Euro has experienced a 24 hour period with as much range as the period earlier in July when it surged higher from from below 1.28 up to above 1.32. Prior to that jump, the Euro had been in a very solid medium term down trend after succumbing to the resistance at 1.29 and moving down below the key long term level of 1.28. This resulted in it trading at a multi-year low near 1.2750. After reaching a four month high above 1.34 about seven weeks ago, the EUR/USD was in the midst of a very solid medium term down trend which has seen it fall sharply.
Throughout May and most of June the Euro surged higher to a four month high above 1.34. Before that in the first half of May, the Euro fell considerably from near 1.32 down to six week lows near 1.28. Back at the beginning of April the Euro received solid support around 1.28 and this level was called upon to provide additional support. Throughout this year the Euro has moved very strongly in both directions. Throughout February and March the Euro fell sharply from around 1.37 down to its lowest level since the middle of November around 1.2750. Sentiment has completely changed with the Euro over the last few weeks and the last couple of months has seen a rollercoaster ride for the Euro as it continued to move strongly towards 1.34 before falling very sharply to below 1.29 and setting a 6 week low.
The Greek Prime Minister, Antonis Samaras, led a huge trade delegation to Beijing in May, and China has shown interest in ports, airports and possibly the national railway. Athens has even launched a new programme to give Greek residency to those who invest at least 250,000 euros in real estate here. A Chinese man has become the first to benefit. Under Cosco’s management, the cargo terminal has doubled the containers it processes but its policies, such as banning the unionisation of staff, are strict. A second terminal at Piraeus is still state-owned and the general secretary of the dockworkers’ union, Giorgos Gogos, wants it to stay that way. He says China’s strategy is self-seeking, preying on a “vulnerable Greek economy” to reap the benefit.
EUR/USD September 9 at 23:20 GMT 1.3254 H: 1.3280 L: 1.3166
During the early hours of the Asian trading session on Tuesday, the Euro is just easing back towards 1.3250 after having surged higher through towards 1.3280. Since the middle of June, the Euro has generally fallen sharply from new highs above 1.34, and has been looking to return back to the significant lows around 1.2800, however in the last month or so it has recovered well and moved back to above 1.34 again. Current range: right around 1.3250.
Further levels in both directions:
• Below: 1.3100 and 1.3000.
• Above: 1.3400.
(Shows the ratio of long vs. short positions held for the EUR/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The EUR/USD long position ratio has fallen sharply back below 40% as the Euro has surged back above 1.3250. The trader sentiment remains strongly in favour of short positions.
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