Forex Trading: Greece Worries Send Euro Near 2-Month Low

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updated | Forex Trading With Forexyard

Greece Worries Send Euro near 2-Month Low

The EUR/USD spent most of the day yesterday near its lowest point since early September, as concerns regarding Greece’s ability to secure a new round of bailout funds caused investors to shift their funds to safe-haven assets. Meanwhile, the price of gold was able to stage a minor upward correction during mid-day trading, but remained within reach of its recent two-month low. Today, all eyes will likely be on the results of the US presidential and congressional elections. If it appears that the closely fought race for president will be too close to call, risk aversion may boost safe-haven assets.

Economic News

USD – Elections Set to Create Dollar Volatility

After hitting a six-month high against the Japanese yen last Friday, the US dollar took slight losses to start off the week due to uncertainty regarding the outcome of tomorrow’s presidential election. The USD/JPY fell more than 30 pips over the course of the European session, eventually trading as low as 80.19 before bouncing back to the 80.25 level. The dollar had more luck against the Swiss franc. The USD/CHF extended last week’s bullish trend by gaining some 35 pips during morning trading to trade as high as 0.9448.

Today, traders will want to pay close attention to any news regarding today’s US presidential and congressional elections. While final election results likely will not be known until late tonight, experts will be issuing predictions throughout the day based on the most up to date polling. Any signs that the closely fought race for president will be too close to call may send investors back to safe-haven assets, which could boost the US dollar and Japanese yen throughout the day.

EUR – Euro Extends Losses against Safe-Haven Currencies

The euro extended last week’s bearish trend throughout the day yesterday, as the combination of concerns regarding Greece and uncertainty about today’s US presidential election weighed down on higher-yielding assets. The EUR/USD fell more than 60 pips during the European session, eventually reaching as low as 1.2778, close to a two-month low. Against the Japanese yen, the common currency fell close to 70 pips to trade as low as 102.50.

Today, euro traders will want to pay attention to the German Factory Orders figure, set to be released at 11:00 GMT. As the euro-zone’s biggest economy, German economic indicators tend to have a larger than usual impact on the marketplace. With today’s news forecasted to come in well below last month’s, the euro could see additional losses during mid-day trading if investors determine that the German economy is slowing down.

Gold – Gold Sees Mild Recovery from 2-Month Low

After tumbling to a two-month low last Friday following a strong US employment report, the price of gold staged a mild recovery during European trading yesterday. Still, investors were careful not to go overly bullish on the precious metal ahead of today’s US presidential election. Prices increased just over $9 an ounce to trade as high as $1684 during the afternoon session.

Today, gold traders will want to pay careful attention to any news out of the US with regards to both the presidential and congressional elections. Some analysts are predicting that gold could recoup some of its recent losses if there are any signs that President Obama will be reelected.

Crude Oil – Oil Range Trades Ahead of US Elections

The price of crude oil saw mild fluctuations throughout the day yesterday, but for the most part remained steady as investors eagerly await the results of today’s US presidential election. In addition, fears regarding global demand kept crude near its lowest level since early July. After falling as low as $84.48 a barrel during early morning trading, oil bounced back to the $84.95 level, where it remained for most of the rest of the day.

Today, in addition to any election news out of the US, oil traders will also want to pay attention to the German Factory Orders figure and Canadian Ivey PMI. Should any of the indicators come in above their forecasted levels, investors may take the news as a sign that demand for oil will go up, which may boost prices during mid-day trading.

Technical News

EUR/USD

While the Williams Percent Range on the daily chart is in oversold territory, most other long-term technical indicators show this pair range trading. Traders may want to take a wait and see approach at this time, as a clearer picture is likely to present itself in the near future.

GBP/USD

A bearish cross appears to be forming on the weekly chart’s MACD/OsMA, indicating that a downward correction may occur in the coming days. Furthermore, the Williams Percent Range on the same chart is hovering close to overbought territory. Traders will want to keep an eye on these two indicators, as they may soon signal impending bearish movement.

USD/JPY

The daily chart’s Relative Strength Index is currently in overbought territory, indicating that a downward correction could occur in the near future. Furthermore, the Slow Stochastic on the weekly chart appears close to forming a bearish cross. Opening short positions may be the smart choice for this pair.

USD/CHF

The Slow Stochastic on the daily chart is currently forming a bearish cross, indicating that this pair could see a downward correction in the near future. This theory is supported by the Williams Percent Range on the same chart, which has crossed into overbought territory. Going short may be the wise choice for this pair.

The Wild Card

AUD/NZD

The daily chart’s Williams Percent Range is currently in oversold territory, indicating that an upward correction could occur in the near future. Additionally, a bullish cross has formed on the same chart’s Slow Stochastic. This may be a good time for forex traders to open long positions ahead of possible upward movement.

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