On Monday, the morale of operators seems fragile, with an opening down the EUR / USD below 1.31 (ie 300 pips drop since last Wednesday).
Several factors converge and support this trend.
On the one hand, the dollar has been rising since the middle of last week after the governor of the Federal Reserve Ben Bernanke said that it would soon begin to reduce its measures to support the world’s largest economy to completely stop at middle of next year.
On the other hand, some traders are worried about the situation facing funding difficulties Chinese banks, they took refuge in the USD, currently the only asset regarded as a safe haven. And the sharp drop in Asian markets all last night reinforces this bias.
But the Fed chairman speech have resulted in a real deleveraging in the equity, bond and currency markets and it drive investors into the arms of greenback.
Considering reducing the liquidity that had flooded the financial markets, there is a sell off on all asset classes outside area USD.
The stock markets of the Eurozone markets fall: CAC40 ended sharply lower Monday (-1.71%), falling to its lowest level since early December 2012.
Bond markets in the euro zone fall: the French OAT took 78 bp since early June, 61 bp for the German bund. As the countries of the periphery of the eurozone,
the Italian 10-year took up 107 bp on Greece is 346 bp.
Currency subject to the carry-trade are simply shorted, as the AUSSIE and KIWI.
There is no longer a safe haven, except the currency of Uncle Sam.And the upward trend continued in the greenback is expected next week.
Thus, on the day, despite a bullish MACD 30min, it will remain on a bearish sentiment. Under 1.3120, we seek an objective of 1.3070. At these levels you can
return to the purchase (SL 3055) with a target of 3120.
On the LT, there is a significant support level at 1.3075 (38.2% Fibonacci retracement from July 2012 to January 2013). Below, the next target will be to support 1.30.
Traders scrutinize economic indicators this week. In particular, they will focus on Brussels on Thursday and Friday for a summit of Heads of State and Government of the European Union.
They will also monitor Tuesday U.S. economics indicators, including durable goods orders for May and consumer confidence in June, looking for new clues about the strength of the U.S. economic recovery.