Euro Turns Bearish
Posted on May 30, 2008
Filed Under EUR/USD, Fundamental Analysis |
Having reached the 1.55 target rather more quickly than I had anticipated the euro has taken a very bearish tone (bearish engulfing candle on the week). Although it is holding up today I believe we can expect a further fall to 1.54. If it begins to approach the 1.53 level - last seen earlier this month - we will be entering very interesting territory.
As mentioned in a previous post COT data is showing net euro shorts so sentiment towards the euro is definitely on the turn. In addition private investors are pulling out of the eurozone at the fastest rate since the creation of the single currency. This is according to the French bank BNP Paribas. This is hardly surprising given the tensions within the eurozone.
Although I am primarily a technical trader using charts and various indicators it is still important to understand the fundamental factors which may or not affect a currency at a given point in a market cycle. The only deviation from this would be on very short term trading, ie scalping.
As always do remember that the dollar swiss correlates negatively to the euro dollar so as one goes up the other will go down!
Good Luck
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