Here is the watch list we prepared at the beginning of the week, based upon the fundamental analysis posted here,Fading Away.  As you may have guessed it is all about fading the many euro ranges that have appeared and our focus once again is on Euro weakness. We were expecting some healthy pullbacks, especially if an agreement or signals of accord started to develop between the troika and Greece, and because we were waiting for the FOMC news yesterday evening and the potential of volatility that that holds.The first three days of the week saw across the board weakness in the USD as it speculated on the words of the Fed and waited for GDP results. In the event, the FOMC were actually a little on the hawkish side down playing the recent soft data and calling present conditions ‘transitory` The GDP results however were indicating stagnation and caused the USD to fall further ahead of the meeting.

The underlying weak state of the eurozone persists for the reasons explained in full in the blog.

EURNZD

This has been on our live list and now on our re-entry list! For reasons given above we were looking for a pullback to 1.4544 for another short position. After the rally this week , we are now watching  1.4775 to see how it behaves

 

 

 

There are many mixed signals here as the New Zealand Reserve bank have indicated an easing policy which will weaken the currency. However the underlyings and the rate differential still favour the short. We will review this next week.

EURUSD

We had a pending sell order at 1.10. We cancelled this before the FOMC for obvious reasons! . Again the weakness of the Euro and the relative upbeat comments of the FOMC make this an attractive short but one we have to wait patiently for and choose the right level. We will see how this one reacts at 1.1264. The correction is not over until it is over!!

 

 

EURCAD

Interesting pair. We were planning to fade the range  at 1.3370.with a tight stop as it presented a strong pullback. The Cad has shown recent strength due in part to a rally in oil and a more positive spin from the BOC. Again this week the Euro has rallied strongly and has been supported by some improving data. We therefore shifted focus to a higher level of resistance to wait for a short at 1.3550. Again it is not a question of simply jumping in at that price but watching for the reaction and waiting for a consolidation and confirmation of a rejection of the level. In these market conditions careful patient trading is required.

 

 

It has been a big news week, especially on Wednesday and the two other rate decisions and I will discuss these and their implications in the full blog next week.

Please remember we are not making trading recommendations. These are ideas for practicing and demo accounts!!

Judith Waker

Robbie Stephenson