27 Oct 2013
Flash: EUR/USD headed towards 1.40 but ST risks a correction - TDS
FXstreet.com (Barcelona) - After a few topside failures around 1.3825/30 area, EUR/USD has stabilized its rate to the low 1.38, with near-term risks shifting towards a modest correction in the short-term, TDS FX Strategists note.
Key Quotes
"Trend momentum signals remain bullishly aligned across a range of timeframes but, with trend channel resistance holding, the slow stochastic studies into overbought territory and daily price action signalling a stall (doji candle), near-term risks are perhaps shifting towards a modest correction in the short-term."
"We spot key short-term support at 1.3645/50, though the former 2013 high at 1.3710 may provide some short-term, psychological underpinning as well. There is no clear sign here—or on the longer-term chart, below—that a major peak is near but we think we need to be alert to the risk of a correction, especially considering the mostly one-way price action seen in this market since September."
"EUR/USD’s extension higher over the past week reflects a well-entrenched bull trend in the market, demonstrated by the bullish alignment of the DMI oscillator across the short, medium and long-term charts. This sort of situation typically reflects a sustained trend in a market that will be subject to limited corrections only. Having cracked the former 2013 high, there is little to suggest that the market will not continue to progress towards the 1.40 area now (potential trend resistance off all time and 2011 highs)."
Key Quotes
"Trend momentum signals remain bullishly aligned across a range of timeframes but, with trend channel resistance holding, the slow stochastic studies into overbought territory and daily price action signalling a stall (doji candle), near-term risks are perhaps shifting towards a modest correction in the short-term."
"We spot key short-term support at 1.3645/50, though the former 2013 high at 1.3710 may provide some short-term, psychological underpinning as well. There is no clear sign here—or on the longer-term chart, below—that a major peak is near but we think we need to be alert to the risk of a correction, especially considering the mostly one-way price action seen in this market since September."
"EUR/USD’s extension higher over the past week reflects a well-entrenched bull trend in the market, demonstrated by the bullish alignment of the DMI oscillator across the short, medium and long-term charts. This sort of situation typically reflects a sustained trend in a market that will be subject to limited corrections only. Having cracked the former 2013 high, there is little to suggest that the market will not continue to progress towards the 1.40 area now (potential trend resistance off all time and 2011 highs)."