SEARCH

Euro / Dollar skyrockets as stop loss levels are breached

The euro (Currency:EUR) is enjoying solid gains agains the US dollar today:

  • The euro dollar exchange rate is currently trading 0.6 pct higher than seen at last night's closing level; EUR-USD is at 1.3056 at mid-day.
  • The euro pound exchange rate is meanwhile unchanged at 0.8643.

NB: The above are spot market quotes to which your bank will affix a discretionary spread. However, an independent FX provider will guarantee to deliver between 2% and 5% more currency by beating your bank's spread. Please learn more.  

The euro skyrocketed against the US dollar in the wake of last night's Q and A session by Dr. Bernanke which was seen as rather bearish.

Bernanke stated that the Fed was failing on both fronts of the mandate as inflation was too low and unemployment too high indicating that monetary accommodation will continue for the foreseeable future.

best euro dollar exchange rate

"The EUR/USD skyrocketed in the wake of his words rising more than 400 points before pausing for breath. The massive short squeeze occurred during the low liquidity Asian session and no doubt exaggerated the move as traders scrambled to cover their positions. The euro effectively recovered several weeks worth of losses in a matter of hours," says Boris Schlossberg at BK Asset Management.

However, according to Schlossberg we could be witnessing the euro dollar exchange rate at equilibrium:

"The swift correction in EUR/USD took it all the way to 1,3200, but the pair has since retracted a bit and has settled near the 1.3000 figure which is likely to be the equilibrium figure for the near term."


Technical levels breached

Gains in the euro dollar exchange rate have only been exaggerated by positioning amongst traders.

Luc Luyet at MIG Bank says:

"EUR/USD has risen sharply, breaking many resistance levels in the process. Resistances can now be found at 1.3207 (intraday high) and
1.3254 (21/06/2013 high). Hourly supports are at 1.3032 (03/07/2013 high) and 1.2928 (61.8% retracement of the recent rise).

"In the medium-term, the rise from 1.2746 (04/04/2013 low) is viewed as a corrective phase within a larger downtrend. Therefore, we eventually expect to see prices moving below the key support at 1.2662 (13/11/2012 low). The recent sharp rebound near the support at 1.2746 does not change this scenario.

Trade this information - by copying a professional. Find out How.

Theme: GKNEWS