The pronounced surge in crude oil prices surrounding President Trump's decision to pull out of the Iranian nuclear deal is softening as the US rig count rises, while USD is easing its charge versus EM and commodity dollars.
Trade view / 03 January 2013 at 9:41 GMT

Selling EURUSD after big reversal

Head of FX Strategy / Saxo Bank
Price target:
Market price:

Trade: Selling EURUSD around 1.3150 - 1.3170

Stop: 1.3217 bid

Targets: 1.3055 and 1.3005

  • The first trading day of the year yesterday saw a fiscal cliff deal that initially saw fresh enthusiasm for selling the USD - theoretically on the fiscal irresponsibility shown by US politicians with this deal, but really because the deal is thought to clear a cloud of uncertainty that provided a boost for risk appetite. But the ugly reversal in the USD vs. the Euro despite healthy risk appetite suggests that the USD has been oversold
  • The Euro rally of late last year was at least partly due to central bank reserve managers unwinding some of their Euro under-weighting from previous fears of EU tail risks. This scramble to buy Euros may ease again now that we are in a new calendar year. As well, the spin on Greece has soured again recently
  • Technically, the large bearish shooting star on the first trading day of the year sets the tone with a bearish short term outlook that could have the pair testing the 1.3000 level in the days ahead. The stop is placed just above the weekly pivot level at around 1.3215.

Trade management: If the pair trades below 1.3130 again, traders can lower stops to 1.3185 bid and if the pair trades below 1.3100, the stop can be pulled down to 1.3155. 

Risk: tomorrow features both the US employment report and the US ISM non-manufacturing survey, either of which could introduce considerable volatility in either direction.

Daily Chart:


Weekly Chart:




Non-independent investment research
This investment research has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further it is not subject to any prohibition on dealing ahead of the dissemination of investment research. Saxo Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. 
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TheWillinator TheWillinator
Thank you John. Target hit. That was a nice present for the new year! :) Hope your new arrival is doing well.


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