There weren’t a lot of nail-biting events last week. Perhaps the biggest market-mover was Fed Reserve Chairman Ben Bernanke’s testimony to the U.S. Congress in which he made it absolutely clear that tapering still isn’t a done deal and that it doesn’t equal to tightening.
His remarks initially sent the dollar lower, but the move wasn’t sustained. After all, Bernanke didn’t really say anything new. It helped the dollar a lot that data from the U.S. came in better than expected (unemployment claims and the Philly Fed manufacturing index) which supported the Fed’s intentions of withdrawing some of its stimulus measures.
This week, we only have second-tier data due from the U.S. I wouldn’t be surprised if we see market sentiment continue to affect price action. I’ll be keeping close tabs on China’s and the euro zone’s manufacturing PMI reports as they could spark volatility among the major currencies in the next few days.
What are you looking out for?
On the hourly timeframe, we see that EUR/USD has constantly gotten rejected around the 1.3200 area. But I just can’t turn the other cheek and ignore the higher lows that it has been making! Because of this, I have a slightly bullish bias for the pair. I won’t pull the trigger on it just yet though, at least not until there’s any fundamental reason to go long.
Similar to EUR/USD, this pair has also been making higher lows as of late. We can actually see a rising trend line from which price just bounced off. I’m a bit hesitant to go long now even though price is already testing the 100 and 200 SMAs. I want to get a feel of the market’s fundamental themes before putting on a trade.
How about you? What pairs are you looking at?