Sive Morten
Special Consultant to the FPA
- Messages
- 18,648
Fundamentals
(Reuters) - The dollar rose against the yen on Friday, extending a broad trend that has been in place since U.S. President Donald Trump's election in November on expectations of more pro-growth policies to bolster an economy that has improved but sputtered at times.
The greenback has climbed for two straight days, pulling it back from seven-week lows against a basket of currencies on the view that it would gain from a rise in border tariffs, tax reform and future spending.
"Donald Trump's ambitious fiscal plans point to stronger growth in the coming quarters," said Fawad Razaqzada, market analyst at Forex.com in London.
"He has hit the ground running, making a number of executive orders in his first week as the president. So hopes that he will boost economic growth are alive and this may keep the dollar bid," he added.
Increasing expectations of tax reforms and fiscal stimulus are easing concerns of trade protectionism, analysts say.
"The heavily abstracted threat of a trade war is unlikely to shake investor confidence until the reality arrives," said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto.
The dollar briefly wobbled after the U.S. Commerce Department's first estimate of fourth-quarter gross domestic product showed that growth slowed more than expected, to a 1.9 percent annual rate due to weak exports. The market was expecting growth of 2.2 percent.
The economy grew only 1.6 percent in 2016, the weakest pace since 2011.
Dennis de Jong, managing director at online currency broker UFX.com in Limassol, Cyprus, described Friday's U.S. GDP number as "solid but not spectacular," and said it should keep the Federal Reserve on track to raise interest rates multiple times this year.
The 4 percent fall in the dollar in the three weeks from Jan. 3 reflected doubts about how the new administration’s policy mix would play out for the currency, particularly after both Trump and Treasury secretary nominee Steven Mnuchin hinted at concerns over the dollar's strength.
But many analysts cast it simply as a necessary adjustment to market positioning before the dollar can deliver on what were widespread expectations of a strong rally in 2017.
In late trading, the dollar was up 0.5 percent against the yen, to 115.11 yen, after touching a one-week high of 115.37 yen.
The dollar also rose against sterling, which fell 0.3 percent to $1.2559 .
The euro, however, gained 0.1 percent against the dollar to $1.0693 leaving the dollar index at 100.60 or 0.2 percent higher on the day.
UK labour market starting to turn
by Fathom Consulting
Despite a 52,000 fall in unemployment in the three months to November, we believe that last week’s release of UK labour market statistics pointed to a slight softening towards the end of last year.
As our chart highlights, much of the reduction in unemployment reflected a decline in the number of people seeking work, rather than an increase in employment. Indeed, after rising sharply through the spring and summer, the number of people in employment fell by 9,000 in the three months to November compared with the previous three-month period.
According to the data, the headline measure of earnings growth reached 2.8% in November. This was the highest reading in just over a year, and will reflect the substantial tightening of the labour market that has taken place over the past few years. In our view, with the demand for labour set to slow, wage inflation is unlikely to keep pace with consumer price inflation through this year, putting downward pressure on real earnings growth.
For now, consumers are in good spirits, with survey-based data revealing a surprising resilience to the uncertainty caused by the Brexit vote. But looking ahead, with sterling acting as a “shock absorber”, consumer price inflation is likely to quicken to 3%, or beyond. This will exceed wage inflation, which we expect to slow over the coming year, squeezing real household income and diminishing purchasing power. As a consequence, in the medium term, the fall in sterling will be deflationary, not inflationary. Recognising this, and the fact that raising rates risks destabilising the economy at an already highly uncertain time, the MPC is almost certain to look through this period of above-target inflation, just as it did in 2008-09 and 2011-12.
COT Report
Speculators pared back favorable bets on the U.S. dollar for a third straight week, pushing net longs to
their lowest since late October, according to data from the Commodity Futures Trading Commission released on Friday and calculations by Reuters. The value of the dollar's net long position totaled $20.04 billion in the week ended Jan. 24, down from $24.44 billion the previous week.
On EUR speculators' possitions stand with major trend. Right now net short position alsmost has reached it's minimal level. As open interest mostly stands unchanged, it means that approx. 70K contracts of short position were replaced by longs,and 10K were opened last week. In general this action supports short-term bullish view that is sufficient for upside retracement. But lack of massive longs opened means that it is difficult to treat this action as long-term bull trend.
Also, EUR is a a bit specific currency from CFTC report point of view, as most time, since 2008 it has net short position.
Technical
Monthly
January is still just inside month and makes no impact on overall long-term picture. We know that fundamental background mostly looks bearish for EUR - potentially more hawkish Fed policy, ECB QE prolongation, coming elections in many EU countries, bringing more uncertainty. After GB, separatistic sentiment start to appear in other countries of EU, as Italy, France, Netherlands, Spain that are not satisfied with Brussels domination in governing EU.
So as New year starts, we have new yearly pivots numbers.
Yearly Pivot (YPP) stands at 1.0828 area, YPR1 = 1.1305, YPS1 = 1.0040. Last one has major importancy for us. It is interesting that 2017 YPS1 coincides with parity.
The only new pattern that we could watch here is possible bearish grabber as January has touched MACDP line. Now we need to wait what close price we will get. This will be weaker type of grabber, but still, on monthly chart it also could be important.
On a way down, guys, EUR has passed through all major Fib levels. Last one was at 1.12 area and now we do not have any other below current market. Also price has dropped below 1.27 extension of this big butterfly. Thus, on monthly chart the only logical destination point stands at parity - 1.618 butterfly extension, chanell trend line support and YPS1.
Also take a look at different behavior near low border of channel. Previously when market has touched it - it shows immediate upside pullback, it was V-shape reversal. Right now behavior is absolutely different, price just hangs on the border and shows no upside action. Any tight consolidation near trendline could become a sign of coming breakout.
Thus, based on monthly chart we could make two major conclusions. First is - real bullish trend will be re-established only if EUR will erase reversal candle and overcome its top above 1.16. Our next target on Monthly chart is parity - 1.618 Butterfly extension, YPS1 and trendline support.
In general guys, we think that steps that already have been announced by ECB and Fed should be enough to push EUR right to parity during "price-in" process, when market will "anticipate" them. But further dynamic will depend on real action from Fed, Trump administration and ECB. How they will fulfill their promises and obligations. Any surprising hawkish measures could push EUR even below parity, while step out from pormises could lead to appearing of reverse H&S pattern on monthly/weekly charts.
In shorter-term perspectives, as we've come to conlcusion that EUR could show deeper upside retracement, our attention is attracted by YPP, that stands at 1.0830 area. This is , in turn, logical destination for short-term upside retracement, as we said earlier:
Weekly
Today we probably have to postpone discussion of weekly targets, since it seems that market will spend some more time in retracement, before it will turn to new extension leg down. Thus, right now we will talk mostly about 3-4 weeks consolidation and price action relatively to this consolidation rather than on big targets of our butterfly pattern.
Trend has turned bullish on weekly, pice is not at OB/OS. Our grabber pattern has beend erased by upside price action last week. Speaking in two words - it seems that EUR will continue upward action to next resistance around 1.0830 area. On a way up it also will test YPP. Take a look that bottom of current consoldation around 1.03-1.04 lows was formed by dojies, a kind of high wave pattern and market was standing in its range almost for month or so. But yesterday, price finally broke it up. It means that market has chosen short-term direction and keeps chances on upside continuation a bit more. Although this fact absolutely doesn't change larger picture.
With big picture on weekly chart we have 2 major patterns - butterfly and inner AB-CD pattern. Now market shows reaction on 1.0 extension target.
Final destination 1.618 point coincides with 1.618 butterfly target. Although we have multiple targets inside 1.0-1.05 area, ther are all minor ones. Recall, that we have daily 1.0230 extension. Also, if you will take a careful look, you could recognize another smaller butterfly inside right wing here. It also has target at 1.02 and 1.013.
But, guys, if EUR will be on a road to parity, all these intermediate targets will be hit very fast one by one.
Also, it is not very probable that market will stuck around 1.27 butterfly and will not go to parity. By two reasons - first is, pshychological pressure, second - when price will hit 1.27, it will be between 1.0 and 1.618 extensions of AB-CD pattern and this position is very unstable, market gravitates to some target... That's why parity probably should be hit.
And after that most interesting thing will come. Take a look that butterfly could become part of large reverse H&S pattern. But whether it will be formed or not will depend on fundamental factors, D. Trump ficsal policy, US economy data and Fed reaction. Thus, we have more or less single road to parity, but later, around it we will get a crossroads...If there will be something bearish that wasn't priced in yet - EUR could drop even further. If not - H&S will start to form...
Weekly
We again will ignore right now discussion of weekly targets, since it seems that market will spend some more time in retracement, before it will turn to new extension leg down. Thus, right now we will talk mostly about 3-4 weeks consolidation and price action relatively to this consolidation rather than on big targets of our butterfly pattern.
Trend has turned bullish on weekly, pice is not at OB/OS. Speaking in two words - it seems that EUR will continue upward action to next resistance around 1.0830 area. On a way up it also will test YPP. Take a look that bottom of current consoldation around 1.03-1.04 lows was formed by dojies, a kind of high wave pattern and market was standing in its range almost for month or so. But last week, price finally broke it up. It means that market has chosen short-term direction and keeps chances on upside continuation a bit more. Although this fact absolutely doesn't change larger picture.
With big picture on weekly chart we have 2 major patterns - butterfly and inner AB-CD pattern. Now market shows reaction on 1.0 extension target. And this reaction is absolutely reasonable. Price has not reached yet even nearest 3/8 resistance, while even reaching of 5/8 resistance of AB-CD swing is acceptable. It means that if our daily H&S pattern will work and EUR will reach 1.10-1.11 area - this will not erase yet long-term bearish picture.
On a way down final destination 1.618 point coincides with 1.618 butterfly target. Although we have multiple targets inside 1.0-1.05 area, ther are all minor ones. Recall, that we have daily 1.0230 extension. Also, if you will take a careful look, you could recognize another smaller butterfly inside right wing here. It also has target at 1.02 and 1.013.
But, guys, if EUR will be on a road to parity, all these intermediate targets will be hit very fast one by one.
Also, it is not very probable that market will stuck around 1.27 butterfly and will not go to parity. By two reasons - first is, pshychological pressure, second - when price will hit 1.27, it will be between 1.0 and 1.618 extensions of AB-CD pattern and this position is very unstable, market gravitates to some target... That's why parity probably should be hit.
And after that most interesting thing will come. Take a look that butterfly could become part of large reverse H&S pattern. But whether it will be formed or not will depend on fundamental factors, D. Trump ficsal policy, US economy data and Fed reaction. Thus, we have more or less single road to parity, but later, around it we will get a crossroads...If there will be something bearish that wasn't priced in yet - EUR could drop even further. If not - H&S will start to form...
Daily
When market stands in retracement - daily picture usually is major time frame to work with. EUR right now is not an exception. Daily chart will be important as in perspective on coming week as on perspective of 3-4 weeks, or even a bit longer.
On coming week we will watch reaching of 1.0830 area and completion of upward rally to neckline of our potential H&S pattern. On Frday we've got more hints. Market indeed has formed bullish grabber as we've suggested in daily video as GDP numbers were slightly worse. It means that market should take out previous top and finally reach strong resistance area, that includes YPP, MPR1 and Fib level. Also some intraday targets stand involved in this area.
On perspective of 3-4 weeks, in turn, we will be monitor how market will form right shoulder of our reverse H&S pattern here and in particular what price behavior will be around its bottom at 1.05. This will give answer on all questions.
That's being said - daily chart tells market market will hit 1.0830 in the beginning of coming week.
4-hour
Here, guys, we also have very interesting short-term construction. I will not draw here the same large butterfly and AB-CD that you have seen in our daily videos. They are still valid, but, here we will try to estimate the pattern that could trigger downside reversal, out from neckline.
It seems that this pattern could be 3-Drive Sell. As you can see 1.618 extension of 1st Drive and 1.27 of the second coincide around 1.0805 area. Yes, it's target stands slightly lower than 1.0830, but market could move 10-15 pips more to reach YPP and resistance. Anyway this is interesting pattern.
And of course, we will keep an eye on validity of grabber. Price should not close below it's lows. Actually grabber is corner stone of our short-term suggestion. If EUR will erase it - this will make bullish background significantly weaker.
Conclusion:
Although we do not see any menace to our long-term view from current upside action - it's scale is too small to make impact on long-term view, market probably will creep a bit higher. As major reason of current upside retracement is lack of clarity on US administration steps in financial sphere - market will wait it until they will come. Thus, there is no suprise that EUR will spend some more time in retracement and could reach 1.0830 target on coming week.
In perspective of 3-4 weeks we will focus on reverse H&S pattern that is forming here right now. Despite what will happen with it - anyway it will give us clear direction.
The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
(Reuters) - The dollar rose against the yen on Friday, extending a broad trend that has been in place since U.S. President Donald Trump's election in November on expectations of more pro-growth policies to bolster an economy that has improved but sputtered at times.
The greenback has climbed for two straight days, pulling it back from seven-week lows against a basket of currencies on the view that it would gain from a rise in border tariffs, tax reform and future spending.
"Donald Trump's ambitious fiscal plans point to stronger growth in the coming quarters," said Fawad Razaqzada, market analyst at Forex.com in London.
"He has hit the ground running, making a number of executive orders in his first week as the president. So hopes that he will boost economic growth are alive and this may keep the dollar bid," he added.
Increasing expectations of tax reforms and fiscal stimulus are easing concerns of trade protectionism, analysts say.
"The heavily abstracted threat of a trade war is unlikely to shake investor confidence until the reality arrives," said Karl Schamotta, director of global product and market strategy at Cambridge Global Payments in Toronto.
The dollar briefly wobbled after the U.S. Commerce Department's first estimate of fourth-quarter gross domestic product showed that growth slowed more than expected, to a 1.9 percent annual rate due to weak exports. The market was expecting growth of 2.2 percent.
The economy grew only 1.6 percent in 2016, the weakest pace since 2011.
Dennis de Jong, managing director at online currency broker UFX.com in Limassol, Cyprus, described Friday's U.S. GDP number as "solid but not spectacular," and said it should keep the Federal Reserve on track to raise interest rates multiple times this year.
The 4 percent fall in the dollar in the three weeks from Jan. 3 reflected doubts about how the new administration’s policy mix would play out for the currency, particularly after both Trump and Treasury secretary nominee Steven Mnuchin hinted at concerns over the dollar's strength.
But many analysts cast it simply as a necessary adjustment to market positioning before the dollar can deliver on what were widespread expectations of a strong rally in 2017.
In late trading, the dollar was up 0.5 percent against the yen, to 115.11 yen, after touching a one-week high of 115.37 yen.
The dollar also rose against sterling, which fell 0.3 percent to $1.2559 .
The euro, however, gained 0.1 percent against the dollar to $1.0693 leaving the dollar index at 100.60 or 0.2 percent higher on the day.
UK labour market starting to turn
by Fathom Consulting
Despite a 52,000 fall in unemployment in the three months to November, we believe that last week’s release of UK labour market statistics pointed to a slight softening towards the end of last year.
As our chart highlights, much of the reduction in unemployment reflected a decline in the number of people seeking work, rather than an increase in employment. Indeed, after rising sharply through the spring and summer, the number of people in employment fell by 9,000 in the three months to November compared with the previous three-month period.
According to the data, the headline measure of earnings growth reached 2.8% in November. This was the highest reading in just over a year, and will reflect the substantial tightening of the labour market that has taken place over the past few years. In our view, with the demand for labour set to slow, wage inflation is unlikely to keep pace with consumer price inflation through this year, putting downward pressure on real earnings growth.
For now, consumers are in good spirits, with survey-based data revealing a surprising resilience to the uncertainty caused by the Brexit vote. But looking ahead, with sterling acting as a “shock absorber”, consumer price inflation is likely to quicken to 3%, or beyond. This will exceed wage inflation, which we expect to slow over the coming year, squeezing real household income and diminishing purchasing power. As a consequence, in the medium term, the fall in sterling will be deflationary, not inflationary. Recognising this, and the fact that raising rates risks destabilising the economy at an already highly uncertain time, the MPC is almost certain to look through this period of above-target inflation, just as it did in 2008-09 and 2011-12.
COT Report
Speculators pared back favorable bets on the U.S. dollar for a third straight week, pushing net longs to
their lowest since late October, according to data from the Commodity Futures Trading Commission released on Friday and calculations by Reuters. The value of the dollar's net long position totaled $20.04 billion in the week ended Jan. 24, down from $24.44 billion the previous week.
On EUR speculators' possitions stand with major trend. Right now net short position alsmost has reached it's minimal level. As open interest mostly stands unchanged, it means that approx. 70K contracts of short position were replaced by longs,and 10K were opened last week. In general this action supports short-term bullish view that is sufficient for upside retracement. But lack of massive longs opened means that it is difficult to treat this action as long-term bull trend.
Also, EUR is a a bit specific currency from CFTC report point of view, as most time, since 2008 it has net short position.
Technical
Monthly
January is still just inside month and makes no impact on overall long-term picture. We know that fundamental background mostly looks bearish for EUR - potentially more hawkish Fed policy, ECB QE prolongation, coming elections in many EU countries, bringing more uncertainty. After GB, separatistic sentiment start to appear in other countries of EU, as Italy, France, Netherlands, Spain that are not satisfied with Brussels domination in governing EU.
So as New year starts, we have new yearly pivots numbers.
Yearly Pivot (YPP) stands at 1.0828 area, YPR1 = 1.1305, YPS1 = 1.0040. Last one has major importancy for us. It is interesting that 2017 YPS1 coincides with parity.
The only new pattern that we could watch here is possible bearish grabber as January has touched MACDP line. Now we need to wait what close price we will get. This will be weaker type of grabber, but still, on monthly chart it also could be important.
On a way down, guys, EUR has passed through all major Fib levels. Last one was at 1.12 area and now we do not have any other below current market. Also price has dropped below 1.27 extension of this big butterfly. Thus, on monthly chart the only logical destination point stands at parity - 1.618 butterfly extension, chanell trend line support and YPS1.
Also take a look at different behavior near low border of channel. Previously when market has touched it - it shows immediate upside pullback, it was V-shape reversal. Right now behavior is absolutely different, price just hangs on the border and shows no upside action. Any tight consolidation near trendline could become a sign of coming breakout.
Thus, based on monthly chart we could make two major conclusions. First is - real bullish trend will be re-established only if EUR will erase reversal candle and overcome its top above 1.16. Our next target on Monthly chart is parity - 1.618 Butterfly extension, YPS1 and trendline support.
In general guys, we think that steps that already have been announced by ECB and Fed should be enough to push EUR right to parity during "price-in" process, when market will "anticipate" them. But further dynamic will depend on real action from Fed, Trump administration and ECB. How they will fulfill their promises and obligations. Any surprising hawkish measures could push EUR even below parity, while step out from pormises could lead to appearing of reverse H&S pattern on monthly/weekly charts.
In shorter-term perspectives, as we've come to conlcusion that EUR could show deeper upside retracement, our attention is attracted by YPP, that stands at 1.0830 area. This is , in turn, logical destination for short-term upside retracement, as we said earlier:
Weekly
Today we probably have to postpone discussion of weekly targets, since it seems that market will spend some more time in retracement, before it will turn to new extension leg down. Thus, right now we will talk mostly about 3-4 weeks consolidation and price action relatively to this consolidation rather than on big targets of our butterfly pattern.
Trend has turned bullish on weekly, pice is not at OB/OS. Our grabber pattern has beend erased by upside price action last week. Speaking in two words - it seems that EUR will continue upward action to next resistance around 1.0830 area. On a way up it also will test YPP. Take a look that bottom of current consoldation around 1.03-1.04 lows was formed by dojies, a kind of high wave pattern and market was standing in its range almost for month or so. But yesterday, price finally broke it up. It means that market has chosen short-term direction and keeps chances on upside continuation a bit more. Although this fact absolutely doesn't change larger picture.
With big picture on weekly chart we have 2 major patterns - butterfly and inner AB-CD pattern. Now market shows reaction on 1.0 extension target.
Final destination 1.618 point coincides with 1.618 butterfly target. Although we have multiple targets inside 1.0-1.05 area, ther are all minor ones. Recall, that we have daily 1.0230 extension. Also, if you will take a careful look, you could recognize another smaller butterfly inside right wing here. It also has target at 1.02 and 1.013.
But, guys, if EUR will be on a road to parity, all these intermediate targets will be hit very fast one by one.
Also, it is not very probable that market will stuck around 1.27 butterfly and will not go to parity. By two reasons - first is, pshychological pressure, second - when price will hit 1.27, it will be between 1.0 and 1.618 extensions of AB-CD pattern and this position is very unstable, market gravitates to some target... That's why parity probably should be hit.
And after that most interesting thing will come. Take a look that butterfly could become part of large reverse H&S pattern. But whether it will be formed or not will depend on fundamental factors, D. Trump ficsal policy, US economy data and Fed reaction. Thus, we have more or less single road to parity, but later, around it we will get a crossroads...If there will be something bearish that wasn't priced in yet - EUR could drop even further. If not - H&S will start to form...
Weekly
We again will ignore right now discussion of weekly targets, since it seems that market will spend some more time in retracement, before it will turn to new extension leg down. Thus, right now we will talk mostly about 3-4 weeks consolidation and price action relatively to this consolidation rather than on big targets of our butterfly pattern.
Trend has turned bullish on weekly, pice is not at OB/OS. Speaking in two words - it seems that EUR will continue upward action to next resistance around 1.0830 area. On a way up it also will test YPP. Take a look that bottom of current consoldation around 1.03-1.04 lows was formed by dojies, a kind of high wave pattern and market was standing in its range almost for month or so. But last week, price finally broke it up. It means that market has chosen short-term direction and keeps chances on upside continuation a bit more. Although this fact absolutely doesn't change larger picture.
With big picture on weekly chart we have 2 major patterns - butterfly and inner AB-CD pattern. Now market shows reaction on 1.0 extension target. And this reaction is absolutely reasonable. Price has not reached yet even nearest 3/8 resistance, while even reaching of 5/8 resistance of AB-CD swing is acceptable. It means that if our daily H&S pattern will work and EUR will reach 1.10-1.11 area - this will not erase yet long-term bearish picture.
On a way down final destination 1.618 point coincides with 1.618 butterfly target. Although we have multiple targets inside 1.0-1.05 area, ther are all minor ones. Recall, that we have daily 1.0230 extension. Also, if you will take a careful look, you could recognize another smaller butterfly inside right wing here. It also has target at 1.02 and 1.013.
But, guys, if EUR will be on a road to parity, all these intermediate targets will be hit very fast one by one.
Also, it is not very probable that market will stuck around 1.27 butterfly and will not go to parity. By two reasons - first is, pshychological pressure, second - when price will hit 1.27, it will be between 1.0 and 1.618 extensions of AB-CD pattern and this position is very unstable, market gravitates to some target... That's why parity probably should be hit.
And after that most interesting thing will come. Take a look that butterfly could become part of large reverse H&S pattern. But whether it will be formed or not will depend on fundamental factors, D. Trump ficsal policy, US economy data and Fed reaction. Thus, we have more or less single road to parity, but later, around it we will get a crossroads...If there will be something bearish that wasn't priced in yet - EUR could drop even further. If not - H&S will start to form...
Daily
When market stands in retracement - daily picture usually is major time frame to work with. EUR right now is not an exception. Daily chart will be important as in perspective on coming week as on perspective of 3-4 weeks, or even a bit longer.
On coming week we will watch reaching of 1.0830 area and completion of upward rally to neckline of our potential H&S pattern. On Frday we've got more hints. Market indeed has formed bullish grabber as we've suggested in daily video as GDP numbers were slightly worse. It means that market should take out previous top and finally reach strong resistance area, that includes YPP, MPR1 and Fib level. Also some intraday targets stand involved in this area.
On perspective of 3-4 weeks, in turn, we will be monitor how market will form right shoulder of our reverse H&S pattern here and in particular what price behavior will be around its bottom at 1.05. This will give answer on all questions.
That's being said - daily chart tells market market will hit 1.0830 in the beginning of coming week.
4-hour
Here, guys, we also have very interesting short-term construction. I will not draw here the same large butterfly and AB-CD that you have seen in our daily videos. They are still valid, but, here we will try to estimate the pattern that could trigger downside reversal, out from neckline.
It seems that this pattern could be 3-Drive Sell. As you can see 1.618 extension of 1st Drive and 1.27 of the second coincide around 1.0805 area. Yes, it's target stands slightly lower than 1.0830, but market could move 10-15 pips more to reach YPP and resistance. Anyway this is interesting pattern.
And of course, we will keep an eye on validity of grabber. Price should not close below it's lows. Actually grabber is corner stone of our short-term suggestion. If EUR will erase it - this will make bullish background significantly weaker.
Conclusion:
Although we do not see any menace to our long-term view from current upside action - it's scale is too small to make impact on long-term view, market probably will creep a bit higher. As major reason of current upside retracement is lack of clarity on US administration steps in financial sphere - market will wait it until they will come. Thus, there is no suprise that EUR will spend some more time in retracement and could reach 1.0830 target on coming week.
In perspective of 3-4 weeks we will focus on reverse H&S pattern that is forming here right now. Despite what will happen with it - anyway it will give us clear direction.
The technical portion of Sive's analysis owes a great deal to Joe DiNapoli's methods, and uses a number of Joe's proprietary indicators. Please note that Sive's analysis is his own view of the market and is not endorsed by Joe DiNapoli or any related companies.
