Forex Trading: EUR/USD Moves Down On The Day

After a night that saw the EUR/USD rise, then fall sharply on the back of a rumor about Ireland (which was later denied), the move to the downside was enough to scare the longs who are simply scared of the prospects of problems in member nations of the EU.  As a result, the EUR/USD has declined back below the close of yesterday at the 1.3183 level

The Retail Sales due at 8:30 should remind people of the weakness in the US (6th straight decline expected). However, the bias remains to the downside for the EURUSD.  Tomorrow the ECB meets and expectations are for a 50 basis point cut.   Although the market would want more, it may be that if they don’t do enough it will be worse for the Eurozone anyway.

Price action and sentiment can shift abruptly.  The low of yesterday at the 1.3139 level is the next target to get through.  However a break of the 1.3259 level on the upside will have to be broken to change intraday sentiment more neutral/positive (see chart).  Watch these levels.

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