FX MARKET WATCH by Marc Chandler
GLOBAL MARKET ROUNDUP
One of the most basic but important questions traders have to ask themselves is whether the market they are looking at is trending or moving sideways. The tactics and tools vary according to the answer. The turn of the calendar - a new marking period begins - offers an opportunity to look afresh at the price action. What makes a review of the dollar difficult, however,
is that we only know
the dollar relative to other currencies and there is no one pattern that fits all.
10 FX TRADER MAGAZINE April - June 2018
EURO
The euro appreciated by 2.7% against the dollar in Q1. The rally was mostly a January story, and for the past two months, it has been trading broadly sideways. One way to illustrate the range-trading is
that the five, 20 and 50-day
moving averages have converged (~$1.2340-$1.2355).
In the larger picture, the euro’s rally since last April when it became clear that the populists- nationalists were not going to
win in the Netherlands or France, has brought it to an important technical area that is has stalled around. The $1.2520 area, for example, marks the 38.2% retracement of the euro’s decline from the record seen in July 2008 near $1.6040.
houses a monthly downtrend line from then as well as
The $1.26 area the 61.8%
retracement of the euro’s decline since mid-2014 when it was last near $1.40.
While those levels give one a sense of likely inflection points on the
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