EURUSD (week: 19 Dec. - 23 Dec. 2005)

Last week, EUR gained further ground against the dollar, as the market considers Fed tightening campaign as nearly ending, while further rate hikes in the Eurozone are seen as highly probable. In our view, the FOMC statement did not entirely account for the EUR rally, however EURUSD ended the week above 1.20 and is probably in for further gains. U.S. trade deficit showed a record figure of almost 69 bln., while on the other hand capital flows improved to 106.8 bln. November CPI in the U.S. showed a decline of 0.6%, which also weighed on the dollar and supported this EUR upward retracement move.


This week, we expect EURUSD to extend its gains and reach 1.2150 before the correction wave is over. 1.2115 (50% retr. of 1.2587 - 1.1640) is the next objective, while on the downside 1.1980 and 1.1955 will probably support the pair. First, a break at 1.2060 will be required for the pair to be boosted towards its next target at 1.2115. A failed test above 1.21 followed by a descent below 1.20 could re-establish bearishness on the hourly studies and possibly bring 1.1700 back into focus.


Disclaimer: Please keep in mind that pipsandtips.com and its publishers do not accept any responsibility for any potential loss or damage (direct or indirect, material or moral) of any kind resulted from the use of any information found on our website. Our analysis and reccomendations are given for informational and educational purposes only, and do not represent offers to buy or sell currencies. Anyone involving in financial transactions does that at his or her own risk and expense, and pipsandtips.com and its publishers shall not be held responsible for any damages resulting from trading real money on the market on the account of the information found here. PLEASE NOTE THAT USE OF OUR WEBSITE IMPLIES KNOWLEDGE AND ACCEPTANCE OF THE TERMS MENTIONED ABOVE.