EUR/USD- Risk Appetite And Yuan Keeps The Uptrend

By: Andrei Tratseuski

Giving a boost by the Chinese Yuan revaluation, EUR/USD continue to perform relatively well. Finally, sovereign debt worries are overshadowed by a positive event in the markets, a rise in the Yuan. The news continue to maintain the Euro in a relatively tight uptrend. Overall, all of the risk currencies are following suit, jumping drastically against the greenback. The Euro rose as high as 1.2470 in London trading, having 1.2500 in its grasp. The currency at the present time is more likely to reach above 1.2500, then head back to 1.2000. For the remainder of the day, the Euro will be subjected to risk appetite or risk aversion flows. Tomorrow's, IFO survey has an ability to move the Euro in either direction.

On technical side, we notice that the Euro remains in a clear uptrend on hourly charts. Only a break of well established support line will put the Euro in jeopardy of loosing the current uptrend. A clear break of current resistance at 1.2470, will spur another drive of the price upwards. A break of support line on hourly charts, may push the currency to the downside. Once looking at the whole picture, technically and fundamentally we derive an upward bias. Nonetheless, keep in mind that the Euro has rallied tremendously over the previous couple days, and is due for some retracement.