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"In Spain and the other peripheral countries, it is clear there has been very large selling by foreign investors and someone needs to pick that up. The uncertainty is making investors more jittery."
- Barclays Capital (based on Bloomberg)
Industry outlook
EUR/USD remained almost unchanged since yesterday, still holding the key level at 1.3200. Although it seems bulls are losing momentum, it is too soon to speak about the trend reversal as the pair is trading above the 55-day MA. To continue the upward rally, EUR/USD has to breach a resistance around the 1.3270/85 zone, confirmed by the 200-day MA and upper bollinger band. A breakthrough here would expose April (1.3310) and March (1.3476) highs respectively.
Traders' sentiment
The situation regarding traders' sentiment on EUR/USD has changed, as bears are now in majority (61.60%), compared to bullish positions (38.40%).
Long position opened
Major market participants are likely to close their long positions at the key resistance levels. The primary short-term target will be reached at 1.3278. The breakout of this level will pave a way for a bullish run up to 1.3320 and then to 1.3357.
Short position opened
Bearish traders will pay attention to the key support levels in order to close their deals. The primary forecast target is 1.3199. If the pair erodes this level, then it might rebound from S2 of 1.3162 or S3 of 1.3120.
© Dukascopy Bank SA