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How soon can euro hold on to $1.30?

The euro is looking to find support at the 1.30 level, but first it has to hold on to that level. Earlier today, the euro did break through the psychologically important mark, but it has since fallen back below 1.30 as economic worries set in.

Indeed, risk appetite is being affected by the weaker housing data in the U.S., as well as disappointing earnings from IBM and Goldman Sachs. With European stocks lower, and U.S. stock futures pointing to a lower open, it is little surprise that risk appetite from earlier is cooling off.

However, the euro forex trading forecast is not terribly bleak. The most recent Spanish auction was a success, and the Irish auction was also successful. German PPI data was surprisingly good, and that is helping as well. There are thoughts that perhaps the euro will be able to hold on to the 1.30 level sometime soon after all.

See AlsoEuro Forex Trading ForecastLooking for currency trends

FXstreet.com (Barcelona) – Reaching its highest level since June 28 in the early hours of trading today, the EUR/CHF has since pared daily gains yet still finds firm support above 1.3400. Currently the pair treads lightly around that critical level, trading at 1.3407 at time of writing which is 0.12% lower from the opening price.

With the pair showing horizontal movement on light volume, the next support levels are placed at 1.3376 and later 1.3343. On the upside, resistance is listed at 1.3419 and then 1.3453.
For more information, read our latest forex news.

Even though the Euro and Pound have been strong against the dollar this week, oil prices have fallen below the $77 level in Wednesday morning electronic trading on the New York Mercantile Exchange.
One barrel of benchmark crude oil for August delivery is currently at $76.77, a 38 cent drop from Tuesday’

FXstreet.com (Barcelona) – The Euro was boosted sharply to 1.4300 level on Wednesday, after the SNB injected a huge capital stimulus into the market. The pair had been previously trading in stagnation phase through strong support at 1.4000 zone.

Wednesday’s rise pared most of the losses the single currency suffered last May 6, when the Swiss Franc downlegged more than 300 pips from key level at 1.4320. The upmove represents a 2.15% rise from previous daily levels.

Into Asia, quieter trading conditions led the pair to fluctuate in a sideways phase through 1.4280. Earlier, EUR/CHF topped at 1.4307, matching yesterday’s high at the exact same level.
For more information, read our latest forex news.

With mixed to slightly better than expected U.K. economic data, traders may be scratching their heads about why the British pound has collapsed more than 300 pips this morning. Here are a couple of reasonsBritish Pound: 5 Reasons Why the Pound is Being Pounded – Kathy Lien

1. Britain’s Prudential announced plans to buy AIG’s Asia operations for $35.5 billion in cash and stock – since this is partially a cash deal, it will involve selling British pounds.

2. Gilts Losing Luster – According to the FT, the gap between the U.K. and German interest rate has risen to the highest level since 2005. Even though the official U.K. interest rate is less than the Eurozone’s interest rate, the cost of servicing government borrowing in the U.K. over Germany has increased significantly.

3. BoE Could Raise QE – Based upon the dovish comments from Bank of England officials at the beginning of last week, there is a tiny risk of the BoE raising the size of their QE program on Thursday. Even if they do not, the tone of their statement will be dovish which is also bearish for the GBP.

4. Short GBP/USD Positions Hit Record Highs – According to the CFTC Commitment of Traders report published on Friday, short GBP and EUR positions have hit the highest level ever. Forex traders are clearly very bearish pounds and they have good reasons to be with jobless claims at 12 year highs and consumer spending falling by the most since Feb 2009.

5. Stop Orders Tripped, Hedge Fund Selling – There has also been a lot of chatter about hedgies selling the GBP. There were a ton of stop orders sitting at the previous 9 month low of 1.5117. When the GBP/USD broke that level, the currency pair dropped very quickly. The selling exacerbated when stop orders at the 1.50 level were tripped, but the big move came when the GBP/USD broke below 1.4935 – it fell 158 pips in 3 minutes.

With so many straws on the camel’s back, it was bound to fall under the pressure. A bounce is not out of the question after such a big move particularly since the GBP/USD has not able to rally for the past 9 trading days. However unless the BoE stops talking about QE and we don’t expect them too, the GBP will continue to be the worst performing currency.

Finally, the GBP/AUD has hit a record low. Last week, I blogged about how shorting GBP/AUD is my favorite trade. At the time it was trading above 1.73 and today it hit a low of 1.6545. Hopefully you managed to bank some solid profits. I still expect it to move lower – but this is where trailing stops should be implemented to lock in profits.

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