*Update EUR/USD Limit Buy at 1.4908

The Euro averted declines below the 1.4800 level as demand continued to be found at the area. The pair rose in Asia and Europe as stocks gained on renewed risk appetite and speculation the global economy will continue to expand.

Investors remain cautiously optimistic on the global economy as we could continue to experience volatility until the years end.

Currency players have also exited Dollar long plays ahead of Tuesday’s FOMC meeting minutes. Further confirmation the FED will maintain the Federal Funds Rate at an “exceptional low” for an “extend period” will continue to see the USD decline.

In addition, FED’s James Bullard said that he supported extending the central bank’s purchases of mortgage-backed securities beyond March. This adds to the speculation the FED’s accommodative stance will continue for the foreseeable future while other nations are already starting to exit their stimulus measures.

Ahead, traders will look at U.S. existing home sales figures, as well as closely monitor Wall Street performance for further near term guidance.

Weak stocks would prompt the pair to retrace some of its gains, while a strong performance in U.S. stocks would continue to support riskier higher-yielding assets

EUR/USD, found strong demand at Friday’s 1.4800 low, extending gains over the 1.4900 level, just shy off the 1.5000.

A bullish tone has been set at the start of the week putting a desired condition for a near term strategy to buy on dips ahead of tomorrow’s FED minutes. However, caution is warranted as U.S. preliminary GDP readings will be released prior to the minutes.

A disappointing GDP figure would put a stop to risk appetite which would likely see the Dollar regain ground on risk aversion flows. In contrast, a positive reading would provide for further gains in riskier, higher-yielding assets.

From current levels, 1.4974, the pair finds initial support at 1.4937, followed by 1.4900 and 1.4850.

Above current levels (1.4974), the pair finds initial resistance at the psychological 1.5000, followed by 1.5014 and 1.5045.

TREND

Near Term: Neutral
Medium Term: Bullish
Long Term: Bullish

Trading levels in play:

New: Limit Buy @ 1.4908 Targets: T1 1.4928 – T2 1.5030 Risk: 1.4840
* After 15 pips profit move stop to entry, take profit at will. Trade is canceled if it rebounds near entry and moves higher by 20 pips. Comments will follow if outlook changes.

Old: Limit Buy @ 1.4898 Targets: T1 1.4921 – T2 1.5030 Risk: 1.4840
* After 15 pips profit move stop to entry, take profit at will. Trade is canceled if it rebounds near entry and moves higher by 20 pips. Comments will follow if outlook changes.

DISCLAMER: The above post is for information only. Before making your investment decisions please acknowledge that the information provided herein should not be taken without your own individual assessment and extensive investigation, it should not be preempted as your own trading strategies, investment advice and/or trading portfolio.
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