It's our 19th anniversary!

Short-term Trading Idea FX USD/EUR: Bear Speculation: Developing on Ideas From 26th January

Trading opportunities for currency pair: recently Greece became once again a region of economic and political instability in the Eurozone. On Friday a report on the US labor market came out. On this news, the euro/dollar dropped 160 points. The tendency for the single currency dropping remains unchanged: TP1: 1.1125 and TP2: 1.0840. This idea is valid whilst the euro/dollar doesn’t close above the 1.1575 mark.

In the long term idea from the 26th January, I looked at the falling value of the euro to 1.0070 against the American dollar by November of this year. The euro has crumbled against the American dollar after the ECB announced its intention to adopt a simulative monetary policy: monthly purchases of 60 billion euro bonds from March 2015 until September 2016. The cumulative total of which will be 1.08 trillion euros.

Looking at monthly values, the euro/dollar rate stopped around the 61.8% level (the fibo level from a 0.8222-1.6038 growth). What else has come about since 26th January?

The early elections in Greece were won by a left opposition coalition, SIRIZA. To this news the euro/dollar rate reacted by dropping in value by 100 points to 1.1097. From this level an upward correction began, since the new Greek government is considering leaving the euro zone. On the back of the correctional growth and the oil price growth, the euro/dollar pair managed to get back to 1.1533.

Recently Greece became once again a region of economic and political instability in the Eurozone. The new Greek government has soured relations with its troika of creditors by rejecting their economic ideas. At the same time, the ECB has announced the discontinuation of accepting Greek state bonds as collateral for loans since the rating of the securities is speculative.

On Friday the euro/dollar rate dropped 160 points following the publication of strong data on the US labor market. In contrast with the forecasted 234,000 and the previous year’s value of 329,000, the quantity of new labor capacity in the US in January was 257,000. November’s indicator was reassessed from 353,000 to 423,000, and December’s from 252,000 to 329,000. The overall recalculation amounted to +147,000. The level of unemployment rose by 0.1% to 5.7%. The index for US average hourly earnings showed a 0.5% January increase (forecasted: 0.3%, previous year’s value: -0/2%).

The NFP data exceeded market expectations and increased the probability of the US Fed increasing the rates in June this year. Recently a configuration reversal has formed. The week closed with a dragonfly doji. On Monday it’s possible there’ll be a slide to 1.1370. From Tuesday we’ll be gearing up for a strengthening of the rate getting on to 1.13. As a long term idea, the target is 1.0070, for this: TP1: 1.1125 and TP2: 1.0840.

Why not take advantage of the improved version of the Trader’s Calculator.

Calculate the swap and point cost >>


Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial markets. Alpari bears no responsibility whatsoever for any possible losses (or other forms of damage), whether direct or indirect, which may occur in case of using material published in the review.

Back to top