eurusd
The new trading week started with the EUR/USD pair pressured at last week’s lows. The pair trades well below the 1.18 level, and the risk is that we will see further downside should the market break the important dynamic support level seen below.
News from Japan spooked financial markets at the opening today. Nomura, a giant Asian investment bank, warned investors of a huge loss with one of its U.S. clients. The estimated loss is around $2 billion, and the bank said that it is in the process of unwinding some positions to handle the trade.
The risk here is that we will see a spillover to other investment houses, as Credit Swiss announced something along similar lines. If that is the case, the risk is that the contagion will shift to other markets, and so, investors will look for safety in the world’s reserve currency, the USD.
The E.U. Summit did not bring anything new for the common currency, so the focus this week shifts to news out of the United States and the all-important NFP report on Friday.
Investors should be cautious at the current levels as the EUR/USD pair may bounce from support. This is a big timeframe, and so the level is significant. Aggressive bulls may want to buy with a tight stop and targeting new highs.
