EUR/USD Outlook – September 13, 2012

September 13, 2012 in Forex Analysis

EUR/USD has been moving in very narrow ranges even though the movement is showing signs of bullishness.

The factors which are keeping the move in check are:

1) Psychological resistance of approaching 1.3000 ranges:

Since May 8th, 2012 the pair has been trading below this and even had dropped as low as 1.2042.

2) Questions about the rescue plans in Euro zone:

On one hand the German court ruling was supportive for the rescue plan after the ECB announcement of the readiness for unlimited bond purchase but on other hand the the lack of agreement of spending cuts in Greece are keeping the uncertainties high. This agreement is required to be able to receive the aid.

3) Policy meeting of Federal Reserve:

Speculations that Federal Reserve will announce plan for bond buying in today’s policy meeting. The meeting is scheduled at 18:15 GMT today.

The key support at first 1.2900 and then 1.2860 may prove to be critical and on the other side the resistance of the recent 1.2936 needs to be broken to expect a test of 1.3000. A test of this psychological level should ultimately take place after such a strong upward move but still a close watch for the supports and careful approach is required.

1 response to EUR/USD Outlook – September 13, 2012

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