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"The euro could see some near-term support from the improvement in risk appetite, but we stick to our strategy of selling rallies. A break above the August high of (around) $1.3450 is unlikely, and we would look to sell around the $1.3320 level."
- Morgan Stanley (based on Reuters)
Pair's Outlook
23.6% Fibo (July to August move) caused some difficulties for the pair in the last few days, but at the moment it seems that the rally should continue in the short term. In the medium to long term, however, the outlook remains bearish for the time being as June high should provide bearish impetus which could easily ignite a major sell off. A solid close above the August high at 1.345 would uplift most of this pressure.
Traders' Sentiment
Situation in the market remains largely unchanged as greenback has clear bullish sentiment across the board and the euro vice versa. Bears account for 62% (+2% since yesterday) of market participants. Distribution of pending orders is exactly the same as in the last few days—51% against 49% with the bears holding marginal upper hand.
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