Euro dollar trade idea: Exchange rate favoured to move down

In our daily trade idea, issued by FuturesTechs, we note the euro dollar is offering little solid guidance.

Nevertheless, a sell could be on the cards:

• Short Term Trend: Neutral
• Medium Trend: Bullish
• Candlestick Chart says: A red candle yesterday gave us a close at 1.3782, the short term 38.2% Fib’ retrace. If we see weakness through 1.3749 we can look for 1.3668.
• Profile Charts say: 1.3796 was yesterday’s POC and has capped upside overnight.
• Summary: Still in the “chop zone”, although my favoured idea for today is selling a break of 1.3749.

US dollar remains mixed

The problem for currency traders at present appears to be the choppy action experienced in the US dollar complex.

As noted by Lloyds Bank Research:

"Yesterday was more about cross activity than USD moves, with the USD mixed against the majors. The US data that was released (durable goods orders and Markit PMI) was mildly encouraging, but not of sufficient importance to have an impact on US yields, which drifted slightly lower.

"Today’s US data seems unlikely to have a major impact on the USD in general, with the Q4 GDP data a second revision. At the moment the USD is showing no real tendency to benefit from the modest improvement in risk appetite seen in the FX market in general, in spite of a general market belief that relatively strong US growth will lead to widening of spreads in favour of the USD.

"It seems unlikely this will change ahead of next week’s ISM data and employment report."