Euro at 61.8% Fibonacci Level

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Euro at 61.8 Fibonacci Level

The traders were expecting the euro to fall yesterday against the U.S. dollar but the bulls took the pair up from its critical level of 1.3423 after which it closed at around 1.3445 mild resistance level. However, good news for sellers is that even though the pair is in short term bullish channel, but the overall sentiment is bearish because it has completed its 61.8% bullish correction of its past week’s fall.

The pair could be sold at this level with small stop losses where it can start moving in its original bearish direction and could target 1.3356 and 1.3325 in a day or two. However, it still has room to go further upwards a bit where market makers may try hitting stop losses that are set at 1.3478 and 1.3484.

In order to play safe, just short the pair when it moves below its today’s pivot point at 1.3421, below which sellers would gain confidence and downward movement could be smooth.

The only fundamental due today for the Eurozone is the Industrial Production, where the growth above 0.2 or 0.3% in the past month could lift the pair up as the investor confidence might turn in again.

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Technically Bearish, but Wait

The British Pound lost massively yesterday where the inflation numbers disappointed the investors where concerns are rising as to why the prices are not in control in the U.K. economy and why the demand from the consumers’ side is still stagnant. The pair lost more than 110 points yesterday and is currently trading just below its today’s pivot point at 1.5889 where easy selling could be done.

However, the market may not move until the release of the critical fundamentals of the GBP where the unemployment rate is due to be released in the European session along with Claimount Count Change data. Moreover, the BoE Inflation report is also due later in the European session.

Therefore, it is advised to the traders that they wait till these economic indicators get released and trade the pair only after analyzing the data and the direction where the market moves. The bearish targets for the pair are 1.5871 and yesterday’s low of 1.5850, but the pair would remain bearish as long as the price is below 1.5986.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com