Fri, 09 Apr 2010 00:00:00 +0200

Greece Concerns Allayed by ECB; EUR Rebounds

The Euro was provided assistance earlier today when the European Central Bank (ECB) announced that interest rates would be held steady - as was expected - and that there was little fear of a sovereign default by Greece. Such a turn of events gave the 16-nation single currency a much needed boost against its primary rival, the US Dollar, but some analysts contend that these gains will be short-lived.

EUR/USD

Yesterday's upward correction may have finished running its course. A bearish cross has formed on the 4-hour Slow Stochastic Oscillator, indicating a possible drop in the price. The price action looks to be contained in the lower half of the Bollinger Bands, as yesterday's breakout failed to breach the 20-day moving average line. This indicates a strong downward trend. Traders may want to go short today.

GBP/USD

This past week the pair has maintained specific price levels, range trading between the prices of 1.5130 and 1.5320. Traders can take advantage of this environment by going short to the support line with a limit at the support level and then going long with a limit at the resistance level. A price breakout above or below these levels would signal an end to this range trading environment.

USD/JPY

The daily chart shows signs of a potential larger move for the pair. The MACD lines appear on the verge of completing a bearish cross, indicating the pair may fall. The 14-day Relative Strength Indicator is very close to breaking the upward sloping trend line. This would support a larger downward price move. Traders may want to wait for the completion of these sell signals and then go short.

USD/CHF

The pair's short term bullish trend is strong as shown by the price action on the 4-hour chart. The pair fell to the 20-day moving average line of the Bollinger Bands where it proceeded to rise once again. This is supported by the 14-day RSI that has resumed its uptrend. A break above the 1.0740 resistance line could signal a potential breakout.

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading. ForexYard