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Weekly EUR/USD analysis: February 11 - 15

By JohnLast 2988 days ago Comments (5)

The recent extreme and directionnal market movements on EUR/US were closely related with fundamental statements and data. One of the main reasons that we fell last week was related with some statements by Mario Draghi after the ECB conference 07.02.2012. He, warned that the high value of th euro was a risk to growth in the Eurozone

However as you can remember the euro began its recent sharp rally following positive remarks by ECB head Mario Draghi about the Eurozone economy.

How can you see this. A possible answer is that there is some kind of macroeconomic agenda about how fast the Euro should rise and any sharper upside momentum is seen as a threat. 

Now I am going to be very brief because I really do not want you to think that is a service I will provide.

I think now that we really again we do need to see the daily candle of Monday in order to see what the market will be for the next week.

As for monday there is 50/50 chance that the market will go to 1.33 or to 1.34

As the market was correcting last week it is hard to predict where the correction will end. I quite agree with the weekly analysis of forexempire that on EURUSD we are in only buy market, the question is where to enter in the direction of the upward trend unless you want to grab a falling knife anywhere.

We have many clusters of support below the market at 1.32 and 1.325. The major support zone is at 1.30 but it lies at the edge of the weekly volatility projections.

The major resistence is 1.34, 1.35 and 1.36


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  • JohnLast 2987 days ago

    The idea of this analysis is not to give market directions but to try to build a reliable map. The entries for me depend basically on trading algorithm. A good discretionary approach is to sell / buy close to support resistance zones betting for bigger profits than stop losses.
    The basic support/ resistance zones on eur/usd are at every 50 pips after round numbers.

  • JohnLast 2987 days ago

    Waiting for the day close, I have forgotten to say that is the holiday in Japan, China, Hong Kong and Singapore and it made for a very thin liquidity day on EUR/USD

    ECB’s Weidmann Says Euro Not Seriously Overvalued.

    So it really looks like those guys want to draw the charts. Something like

    "The drop on EUR/USD was nice, thank you now you can begin a rally or broad consolidation is just fine, but don't go much lower otherwise we are going to make new optimistic statements. And we are going to squeeze your tight mother fucker stops"  LOL 

  • JohnLast 2984 days ago

    Here I want to add this week current picture about the support and resistence and basic market statistics. At first just have a look.  

    Those future support and resistence zones are in the orderbooks. In order to get the whole idea about support and resistence it is important to have a look in the order books not only at the charts.

    The prices very often overshoot the true support and resistence levels and that adds a lot of confision leading to large errors in support and resistence identification relying only on charts.

    The charts are often very misleading with lots and lots of fake technical patterns. Very dangerous are the patterns which rely on projections of volatility like projections of contracting of volatility.

    Some of the supports and resitences are related with purely statistical limitations of the current pice action.

    However the practice is difficult, as the price series are fractal even if you put support and resitence in random places you will find matches, and a lot of matches.


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  • JohnLast 2984 days ago

    Feb 14 (Reuters) - The euro hit a three-week low against the dollar on Thursday, falling around 1 percent on the day after data showed the euro zoneeconomy contracted more than expected in the final quarter of last year, leaving the bloc in recession.

    Traders said comments from European Central Bank Vice President Vitor Constancio on negative interest rates being a possibility also weighed on the single currency.

    The euro fell to $1.3320, its lowest level since Jan. 24. Market players said stop loss sell orders were triggered on the break below Monday's low of $1.3325.

    Feb 14 (Reuters) - Policymakers must be careful not to ratchet up rhetoric about "currency wars", which could lead to something worse happening, European Central Bank Vice President Vitor Constancio said on Thursday.

    Contradictory remarks from officials from Group of Seven countries about a G7 statement designed to cool international currency tensions have only led to more market volatility.

    "We have to be cautious in my view not to build up the rhetoric about currency wars, because if we build up the rhetoric the danger is there that something worse can happen," Constancio told a forum in Brussels.

    "The euro has been volatile ... so the situation is what it is," he added. "We look at the exchange rate because it has an impact on the inflation rate that we are analysing all the time."


  • JohnLast 2984 days ago

    Have a look at the grid. The EURUSD has natural primary support and resistence zones at round numbers.


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