The resistance-zone between the intraday-high set after the latest FED policy meeting (that was sold off almost as fast as the level was reached) and the last significant low at USD1.1097 held and the euro reversed after two failed intra-day attempts. We have seen a pullback to USD1.0712 and the single currency is re-approaching the level again - currently trading at USD1.0876, slightly below yesterday's intra-day highs. A re-test of the resistance zone in the days to come seems likely.
'Even though it might not be a valid technical argument, history has proven that when it looks the worse things might take another route. This might be a dangerous bet as the trend is your friend but oversold stays oversold.'
That was the concluding sentence of my blog entry dated March 12th 2015. A day later the single currency set a new 12-year low against the greenback at USD 1.0461 and then started to climb. Currently the euro is trading at USD1.1033 -572 pips higher.
Right at the moment we have reached a very interesting level.
On Friday, the 13th of March the euro set a new 12-year low against the U.S. dollar at USD1.0461. One week later the single currency trades above USD1.0650 again - currently about 200 pips above the low. So far so bullish - or at least a phase of stabilization of the 'oversold' euro. Only if there would not have been the skyrocketing euro after the FED statement, trading as high as USD1.1022, just to be sold off a day later. Of course the bullish movement was partly driven by a short-squeeze but still a very valid sign of life and an indication that the euro might enter a pullback.
Today the euro set a new 12-year low, touching intraday USD1.0493.
That was slightly lower than I thought the single currency would decline, and it took the euro less time than I had anticipated. Nevertheless, the euro is now trading back above USD1.0600 and the greenback´s rally is taking a breather.
Although the single currencies long-term downtrend versus the greenback - since July 2008, where the euro hit its all-time high at USD1.6063 - is fully intact, there is a good chance of a stronger pullback.
Recap: the single currency is in a long-term downtrend versus the greenback since July 2008, where the euro hit its all-time high at USD1.6063. In the last months trading became more volatile. We saw a massive slump in the first days of 2015. The downward resistance line (green) steepened again as the single currency continued to decline versus the greenback. The single currency hit a new 11-year low at USD1.1097 and then entered a phase of stabilization. Still the euro registered an eigth consecutive month of losses versus the greenback.
Since its low on October 16th the DAX is in rally mode again. The intraday low at 8350 points was the start for a new climb towards its all-time high currently at 10,987 points in the DAX-future, only short 13 points of the magic 11,000 level. Bullish momentum slowed in the last couple of days but the bullish trend is still intact. The situation is comparable to the one we saw at the end of January. A slow approach to the all-time high at 10,854 points and once the level was overcome we saw strong upward momentum. The last low at 10,793.50 was quickly reversed.
Recap: the single currency is in a long-term downtrend versus the greenback since July 2008, where the euro hit its all-time high at USD1.6063. In the last three months of 2014 trading became more volatile and we even saw a breakout over the latest resistance line (red) where the currency-pair managed to stay for a short while before being sold off again. After closing below the established support (pink) for three consecutive days at the end of 2014, we saw a massive slump in the first days of 2015.
The single currency is in a long-term downtrend versus the greenback since July 2008, where the euro hit its all-time high at USD1.6063. In the last three months trading became more volatile with stronger pullbacks but with the exception of a false breakout from December 10th to December 17th, with the euro almost reaching intraday a higher high, the currency pair traded within its established corridor. After breaking the low from December 8th we saw further downward momentum and the euro just managed to stabilize above the support of its downtrend around USD 1.2160, trading as low as USD1.
In the larger picture the single currency established a long-term downtrend versus the greenback since July 2008, where the euro hit its all-time high at USD1.6063. The last bearish trend started in May 2014. Since then we saw the euro decline from USD1.3993, to an intraday low at USD1.2246 on December the 8th. Rebounding from the low the euro managed to break through its steep downtrend resistance line reaching USD1.2569 on December 16th but the euro came under further pressure and is now quoted at 1.2275, just 19 pips from its low.
The German DAX is currently trading above the decisive level around 9,735 points after pulling back from an all-time high at 10,096 reached on December the 5th. Since then the Index has seen volatile trading, declining as far as 9,694 in today's session being quoted just above the resistance of its downtrend established in July. After three months of rally-mode, the DAX is trading below the uptrend line of its bullish move for the first time since establishing a low in October at 8,348.50.