Fundamental and Technical analysis are just two of the basic forms used to enhance traders skills and improve the ratio of success in trading any market condition. Market Psychology however, plays a significant role in adding a true and meaningful basis in measuring the prevailing real sentiments behind what we all see in the market place even before any extensive reports that affect the prices.
EURUSD MONTHLY CHART
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In relation to the current market condition in the Currency Market, it is clear enough that the established trend had started since August of 2011with a corrective move in October for the Euro contrary to the US Dollar in the same period. From time to time, the perception on the market changes due to so many variable factors. A registered high and reversal price at 1.4940 last May 2011 has now completed its 61.8% FIBONACCI retracement levels currently at the 1.2989 and attempting to cover it extensions at the 1.2880 major support levels. The price levels are within the channel unless the extensions would fall below the 1.2880 which again should not be discounted. This may find some form of support with end of the year book-squaring and position adjustments that may also trigger some corrective moves thereafter and a consolidation period. This has been the orderly depreciation for the Euro to this levels without drastically hurting the market and investors. And a counter relief for the US Dollar to recover in a ladder-like manner the same way it did last December of 2009.
The gradual movement for the USDX as its counterpart have shown it wide market swings from both directions, confusing as it may seem but the steadier conditions for the USD to move higher were actually there, of course with some conflicting analysis along the way.
With that said, the price behavior of the USD have indicated these bullish signals so far by cloaking itself to be bearish from time to time. The corresponding low price established for the USDX at 73.45 basis point was indeed in line with the 1.4940 for the Euro. So for now the question as to what would be the objective price that both the USD and the Euro would settle at by the end of the trading year. Therefore, by which measure should we use to answer this question would really depend on the last trading week of the year. But surely, as we have mentioned in our previous market view report that the USDX will be above the 80.00 basis point level.
With so much articles, reports and versions as to why certain movements were made most of the time can be very confusing. That is why we try to minimize such noises in between and see through what is behind such actions even before these reports comes out. And this is where the degree of trading difficulty would depend on arriving at an informed trading decision that would hold true and correct in a specified period of time.
For this particular period of time, where we are nearing the end of the trading year the prevailing market sentiments have been established for sometime. Although, we have been caught in between the TUG of WAR in prices, a not so good economic review from both sides of the continent. And to top it all is the current political division from both the US and the Euro Zone that have influenced global markets and trade.
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