The euro plummeted fast as reports have indicated that the European bank stress tests are more lenient (are not testing simulations of sovereign default) than had been previously expected, Dow Jones reports. EUR/USD lost quite a bit of ground within minutes from the day’s high of 1.2966 to a bottom (so far) of 1.2794.
It’s 09:25 and I just mad a U-turn. The Euro has been trying to break through the 113.30-ish area for a few days. As I wrote yesterday, a couple of posts ago, very possibly the ECB is going to come up with some fantastic-looking results of its banks’ stress tests on Friday.
Stop loss: as per the trading plan
Target: some 70-80 pips above the resistance at 113.40, haven’t set it yet.
The daily chart:
It’s 9:02 am GMT, and after 12 days of having my EUR/JPY short position open, I just covered it for an amazing profit of … brace yourselves… 4 pips! Ludicrous, ain’t it! That’s all a JPY forex FAN could achieve in 12 days. I hope some day I will move this site to jpyforexpro.com ha ha
I leave you with the beautiful daily chart of the ranging EUR/JPY:
The euro rose as high as $1.3028 early in Tuesday’s European session but then faltered and is currently trading under 1.3000. Will it finally break out and shoot for 1.31 as forex strategists claim it very well might do? Maybe traders are just anxiously awaiting the results the European bank stress-tests.
“The euro rallies on good news and euro doesn’t drop much on bad news,” said Andrew Busch, global currency strategist at BMO Capital Markets, MarketWatch reports. “The big test for this trend will be Friday when the European bank stress tests are released.”
EUR/USD daily chart:
The Japanese yen, long a shelter for risk-averse investors, was heavily bough yesterday and in Asian forex trading today as regional stock markets skidded because of fear about US growth prospects.
“As market participants appear to be focusing on [U.S. dollar] weakness driven by concerns about the U.S. economy and receding U.S. rate expectations, USD/JPY, which has traditionally been sensitive to yield support, lost ground,” Tomoko Fujii, a strategist at Bank of America Securities-Merrill Lynch, said in a note to clients Friday, cited by MarketWatch.
Yesterday the euro rallied to above $1.2900, forming higher high and higher lows, as a successful Spanish auction eased worries about Europe, while signs of a slowdown in US economic growth pressured the greenback.
Makes me want to have shorted the USD/JPY instead of the EUR/JPY. Arghh.
The US dollar advanced against the other major currencies today, gaining back some ground on the euro.
Plans to publish so-called “stress tests” to be administered to Eurozone banking sector institutions have been key in helping to boost the euro. Germany, Spain, Portugal, Italy and France are all slated to sell debt this week, according to Royal Bank of Scotland, as cited by MarketWatch.
