The price action in the EURUSD was compelling on Friday. Most traders expected the cross to remain rather quite heading into Ben Bernanke's Jackson Hole speech. The pair defined expectations and pushed higher in European trading. Breaking above the weekly resistance zone between 1.2590/60 and briefly touching the descending yearly trend line around 1.2630.
The move higher in European trading was attributed to rumors the ECB was going to announce a bond buying program next Thursday, combined with talk of Bundesbank president Weidmann threatening to resign. These rumors pushed the Euro to the top of its range and muted the comments from Bernanke suggesting a form of monetary easing may be appropriate in the future.
Heading into next week all eyes will be on Thursday Sept 6th, to see if any sort of bond purchase announcement emerges from the ECB meeting. In the short-term the EURUSD traded rather technically today. Reversing at the daily descending trend line that has guided the pair lower since last October. Support now begins at past resistance at 1.2560. A break below this level exposes the pair to a retest of the range bottom at 1.2480. A bounce at this level could lead to another test of the descending trend line to start the new week. Trading could be light to start the week with the Labor Day Holiday in the USA on Monday.
Sup 1.2560 1.2480
Keane Plan...Watching the 1.2560 level. A break or hold will dictate price action to start next week.
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