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EUR/USD Weekly Review 28 Aug 11

, 08-28-2011 at 10:15 AM (1636 Views)

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[FONT=verdana]In the previous EUR/USD Weekly Review, we noted that both SMAs remained flat. This suggested that any sustained momentum might not be a big possibility. The long term SMA 200 was still lurking below the current price action of the currency pair and would probably continue to exert it's influence as a strong support. From a fundamental point of view, gold continued to soar as a choice of risk aversion. The US Dollar was receiving lesser demand, probably a result of the recent US negative developments. The prospect of low interest rates for a long period of time probably mulled demand too. Over in the Euro Zone, possibility of a joint Euro Bond continued to remain in murky waters.[/FONT]

[URL="http://1.bp.blogspot.com/-3fqQgG20ZpE/TloN6tV60QI/AAAAAAAAC2g/u-uauKV21og/s1600/1.jpg"][IMG]http://1.bp.blogspot.com/-3fqQgG20ZpE/TloN6tV60QI/AAAAAAAAC2g/u-uauKV21og/s400/1.jpg[/IMG][/URL]

[FONT=verdana]Technical Analysis[/FONT]

[FONT=verdana]Previously i mentioned on the possibility of a squeeze induced breakout. While not a full blown scenario, the above EUR/USD chart suggests a upside breakthrough.[/FONT]

[FONT=verdana]SMA 20 = upwards[/FONT]
[FONT=verdana]SMA 50 = flat[/FONT]

[FONT=verdana]Now that the SMA 20 has pointed upwards, our next move will be to monitor the SMA 50. Should both SMAs point upwards, the possibility of a sustained bullish momentum is higher. While there were few bearish dips last week, we are still theoretically in a range that extends up to 1.46. In the immediate vicinity, the 1.45 is proving to be a tough nut to crack. If it gives way to the bullish momentum, we may be looking at 1.46 next.

[B]Continue on to TheGeekKnows.com for the [URL="http://www.thegeekknows.com/2011/08/eurusd-weekly-review-28-aug-11.html"]fundamental analysis of the EUR/USD[/URL] Weekly Review to understand more about the underlying market sentiments.[/B]
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