Euro Hitting Three Week's Low

Euro has been hit hard agianst the dollar which is becoming stronger against basket of currencies and it has only fallen against the higher yielding currencies. The Euro has continued its slide on Thursday by hitting new three week’s low as investors are worried there will be more drama coming in Washington when politicians will start discussing the budget cuts and debt ceiling in coming few weeks. According to Reuters traders have reported the euro has extended its slide to the downside after stop losses were triggered during the Asian trading when it made its low of 1.3124 which further opened the floor for more stop losses below 1.3090. However, investors remain focused on the fact euro currency has gained almost 10% since Mario Draghi made comments “whatever it takes to save the single currency”.

This does not mean that fundamentals in the single currency are off the hook as this selling pressure can pick up more steam and will push the single currency out of its current trading zone of between 1.27 to 1.33. Yesterday’s data on Euro zone factories showed disappointing number for the single currency where factory order sank deeper into recession during the month of December with final reading of 46.1. On the other hand green back had positive results where manufacturing ended up United States of America for the year ending 2012

Technical Analysis
On the Technical front EURUSD has broken its recent support and there is constant pressure as the RSI is not showing any divergence however it is in oversold zone so should we see double bottom in this region for RSI, Euro can potentially see upward relief rally.

Key levels
1.3235
1.319
1.317
1.30981 last
1.306
1.304
1.3015

DISCLOSURE & DISCLAIMER: The Above Is For Informational Purposes Only And Not To Be Construed As Specific Trading Advice. Responsibility For Trade Decisions Is Solely With The Reader.

by Naeem Aslam