Euro dollar exchange rate comment September 6, 2010
EUR/USD to trade with bullish bias. Buoyed by weak USD sentiment, EUR demand for long-EUR carry trades on decreased risk aversion; above-forecast euro-zone August composite PMI of 56.2 (vs 56.1 expected), stronger-than-expected 0.1% on-month rise in euro-zone July retail sales (vs forecast for no change). EUR/USD daily chart positive-biased as stochastics bullish; 5-day moving average staged bullish crossover against 15-day. Resistance at 1.2923 (Aug. 18 high); breach would target 1.2959 (50% Fibonacci correction of 1.3333-1.2584 Aug. 6-Aug. 24 decline), then psychological 1.3000 and 1.3047 (61.8% correction). Support at 1.2807 (Friday''''s low); breach would temper near-term positive outlook, targeting 1.2775 (Thursday''''s low), then 1.2661 (Wednesday''''s low), 1.2623 (Tuesday''''s low) and 1.2603 (Aug. 25 low).
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