The EUR got a little reprieve overnight pulling it back to 131.oo resistance. This rally was overdue but transpired in a muted fashion from a technical standpoint . . we didn’t see the 75-90 pip waves that accompanied recent overnight gyrations. HOWEVER, note that the LR24 is currently down slope and trending back towards the 130 jumping off point.
Looking at the longer term charts (4 hours and daily) – which are not shown – the EUR/USD remains in a solid downtrend. Although there may be a few relief rallies along the way 128 still looks more probable than possible. First of the month buying and an aggressive $6-8 B/day POMO program balanced against year end tax selling have buyers in the lead after the first hour of the US equities market but the NYAD is on a 45 degree decline suggesting buying volume will soon subside with FXE following along.
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