cashbackforex
Junior member
- Messages
- 19
- Likes
- 1
As the market focused on the French political situation, the Euro seemed determined to mount a rally; however, yesterday the negative Greek situation moved to centre-stage. The spreading bearish psychology has taken most asset groups lower. It is surprising that the Euro refuses to stay under the 1.30 handle versus the USD. The market acts like there may be central bank support around this level.
During recent bear moves in the EURUSD, as we observed last month, support emerged in the 1.30 area, and the bulls carried the day. Not so Monday as the market, unnerved by the week end election results, left a gap as it sold off to 1.2955. Then the selling abated, and the market rallied back to the 1.3065 area where it stalled. So far in the early trade today, the gap between the high yesterday and the Friday low of 1.3081 remains unfilled.
Gaps, as the technical traders contend, are quite important, and the gap is always filled, they contend. Gaps in Forex markets are rare since these markets trade around the clock from Sunday evening until Friday afternoon. But the longer it takes to fill this gap, the greater are the chances there is another leg down in the Euro.
In Monday's lower market, the open interest in Euro futures at the CME went up 8,295 contracts to the total open interest of 312K. Also in the very active British pound trade, the OI increased over 8K contracts. Often markets continue in the direction of the trade on a day when the OI goes up.
We continue to be surprised by the support near the 1.30 handle considering the bearish backdrop from Europe.
During recent bear moves in the EURUSD, as we observed last month, support emerged in the 1.30 area, and the bulls carried the day. Not so Monday as the market, unnerved by the week end election results, left a gap as it sold off to 1.2955. Then the selling abated, and the market rallied back to the 1.3065 area where it stalled. So far in the early trade today, the gap between the high yesterday and the Friday low of 1.3081 remains unfilled.
Gaps, as the technical traders contend, are quite important, and the gap is always filled, they contend. Gaps in Forex markets are rare since these markets trade around the clock from Sunday evening until Friday afternoon. But the longer it takes to fill this gap, the greater are the chances there is another leg down in the Euro.
In Monday's lower market, the open interest in Euro futures at the CME went up 8,295 contracts to the total open interest of 312K. Also in the very active British pound trade, the OI increased over 8K contracts. Often markets continue in the direction of the trade on a day when the OI goes up.
We continue to be surprised by the support near the 1.30 handle considering the bearish backdrop from Europe.
