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28 Sep 2013
Flash: EUR/USD stuck in a big, brad range – TD Securities
FXstreet.com (London) - Research teams at TD Securities round up the week with an insight into the activity around the EUR/USD.
Key Quotes:
“EUR/USD has traded sideways around the 1.35 area over the past week, consolidating the sharp gains through the low 1.34 resistance zone (now support) seen late the week before”.
“The charts are producing some conflicting signals—strong, bull trend versus overbought—over a range of timeframes which suggests that while the basic set up here looks constructive (potential bull flag break out above 1.3570), the market looks stretched”.
“We think the market will “go with” a move either above 1.3570 or below 1.3465 in the near-term, reflecting the conflicting signals and the lack of conviction in the market at the moment”.
“Weekly studies reflect the picture on the short-term charts—bullish trend momentum versus heavily overbought signals on the slow
stochastic oscillators. The narrow range this week (on no follow through buying interest) leaves the broader picture looking as mixed
as the daily chart. There is no conviction behind the EUR’s rally, it would seem”.
“A down week next week would be a major negative for the medium-term picture (major reversal potential on a big net loss) but absent a reversal, the EUR still risks grinding up towards 1.3700/10 having moved above 1.34. We still rather think EUR/USD is stuck in a big, broad range—and closer to the top of the range at 1.37 than the lower end (1.27)”.
Key Quotes:
“EUR/USD has traded sideways around the 1.35 area over the past week, consolidating the sharp gains through the low 1.34 resistance zone (now support) seen late the week before”.
“The charts are producing some conflicting signals—strong, bull trend versus overbought—over a range of timeframes which suggests that while the basic set up here looks constructive (potential bull flag break out above 1.3570), the market looks stretched”.
“We think the market will “go with” a move either above 1.3570 or below 1.3465 in the near-term, reflecting the conflicting signals and the lack of conviction in the market at the moment”.
“Weekly studies reflect the picture on the short-term charts—bullish trend momentum versus heavily overbought signals on the slow
stochastic oscillators. The narrow range this week (on no follow through buying interest) leaves the broader picture looking as mixed
as the daily chart. There is no conviction behind the EUR’s rally, it would seem”.
“A down week next week would be a major negative for the medium-term picture (major reversal potential on a big net loss) but absent a reversal, the EUR still risks grinding up towards 1.3700/10 having moved above 1.34. We still rather think EUR/USD is stuck in a big, broad range—and closer to the top of the range at 1.37 than the lower end (1.27)”.