EUR/USD challenges lows near 1.3350

FXstreet.com (Edinburgh) -The single currency is mired into the red territory on Friday, dragging the EUR/USD to the area of 1.3350/45 against the backdrop of increasing selling pressure.

EUR/USD bounces off 1.3320

The pair seems to have found decent support around 1.3320, although still trading under the effects of the surprising results from October Payrolls (204K act. vs. 125K exp.). According to James Knightley, Analyst at ING, “This week’s strong set of ISM readings, a 2.8% annualised growth rate for 3Q GDP and now a firm labour report suggests that the probability of the Federal Reserve taper starting in December has increased. However, these are just the numbers from one week. We suspect the Fed will want to wait for more evidence to ascertain the true impact of the government shutdown and the subsequent trend in activity”.

EUR/USD levels to watch

As of writing the pair is now losing 0.51% at 1.3349 and a violation of 1.3295 (low 7 Nov.) would aim for 1.3294 (50% 1.2755-1.3833) and then 1.3254 (low Sep.13). On the upside, the immediate resistance lines up at 1.3548 (high Nov.6) ahead of 1.3589 (high Nov.1) and then 1.3591 (38.2% of 1.3833-1.3442).

Flash: Implications for the Fed – Rabobank

The currency research team at Rabobank explained while the chance of a December taper has increased, they don’t believe the Fed is in a hurry, because of several reasons.
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