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Thursday, December 07, 2006

Euro Outlook (6th December 2006)

1.3260 now stands as the session, intraday & 3-Day low in EUR/USD after the European morning saw a stop loss driven drop following the break below 1.3280. A host of accounts from all walks of the FX world are said to have had positions cleared in the move but trading has now managed to steady as the Euro remains underpinned ahead of the ECB verdict tomorrow.

Despite the weak German data late-on the pair now noted solid demand ahead of 1.3250 with more stops tipped below here while on the topside dealers see the 1.33 mark as the immediate hurdle. Then the previous failure high at 1.3367 will be eyed. Looking ahead, ADP Jobless data is set for release at 13:15 GMT and dealers cite this as the short-term risk for the US unit into North American trading.

The consensus is seen at 100K but any significantly different reading will have Non-Farm Payroll speculation running riot ahead of the Friday release for the latest Employment report. Following this, 16:30 GMT sees Transport data. On the options front, large 1.30 strikes and large 1.35 RKO's roll-off at the NY cut at 15:00 GMT but there is also talk of 1.3300 expiries intraday.

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