FX Market Review – Has the Euro Hit Its Rock Bottom?

Written by: Dave Green • Monday, July 9, 2012 • 2 min read

• Last updated: Monday, July 9, 2012

The Euro is traded close to a two year low against the U.S. Dollar, steady at 1.2300. Fears of the global debt crisis and negative market sentiment slow down investors, who are concerned about the risky currency. Positive data along with encouraging words from ECB president Draghi might send the Euro up for a correction against the Dollar.

Despite poor results of the NFP report on Friday, the greenback raised against all of its rivals. The feeling among investors was that the results were not bad enough to encourage further economic stimulations by the U.S. FED. So we are left with a poor, depressing sentiment on the riskier currencies such as the Euro, Franc and Pound, and with no expected major events in the week ahead, it feels as the dollar might rise even further, breaking records against the Euro.

The financial depression also hits other currencies with higher risk level, such as the Australian dollar and the Kiwi.

Euro, Pound, and Yen are bearish, traded further beneath their previous retracement levels. The Australian Dollar fell to one week low against the Dollar, hitting 1.0180 during late Asian session. Support can be found at 1.0130, and resistance at 1.0275.

Having cleared the ECB rate decision and the wait-and-see influence of the June NFPs, there are few events ahead that can carry the necessary influence to maintain hope.

Without the promise of stimulus to hold onto, traders will have only tangible fundamentals to work with.

Looking for a potential opportunity? After reaching its two year low (!), the pair EUR/USD is standing on an important intersection. The majority of analysts think that we might head a correction, to a 1.2400 area, before moving to its next market trend. So, market sentiment on the Euro is bullish.
Stay tuned with FXML signals to trade on the Euro