EUR/USD tumbling to fresh 4-year lows

The German naked short-selling ban has triggered concerns that the crisis in Europe is one of yet unimagined scope and size, says Trader. This has sent EUR/USD tumbling to fresh 4-year lows, and the trader says selling on any rally is favored ahead of a break below 1.2000. EUR/USD now at 1.2200.

GBP/USD ...Today

GBP/USD breaches key 1.4860 support and slips quickly to 1.4840. Trader chartists say a sustained break of this level calls the end of GBP/USD's recovery from its post-election lows of 1.4450, and opens risk back towards this area. The spot now trades at 1.4847.

GBP/USD ...a veiw

GBP/USD reversed sharply to the downside Wednesday after the BOE's dovish Quarterly Inflation Report notes trader. The trader says the spot has key support at 1.4860 and failure here will confirm that the recent rebound is complete, 1.5055 was a corrective top and a decline back to last week's 1.4475 lows is underway. Further out, the trader remains bearish on GBP/USD looking for a move towards 1.2800 in the 1Q of 2011. GBP/USD now at 1.4870.

GBP/USD ...todat

Allow for near-term corrective upside in GBP/USD says trader, with risk seen toward 1.5120 and possibly 1.5290. However trader remains long-term negative on the spot with targets of 1.4370 and 1.4255, the latter being the last line of defence ahead of the 2009 low of 1.3500. GBP/USD now at 1.4988.

GBP/USD downside risk toward 1.4700

GBP/USD remains in a clearly defined 1.51 to 1.5550 range notes trader with its 21 DMA at 1.5340 continuing to be a pivot point. While below here the trader says there is a high probability of a downside break which would be a serious blow for sterling bulls as it opens downside risk toward 1.4700. GBP/USD now at 1.5184.

EUR/USD outlook is bearish

There may be some upside in EUR/USD as the Greece story pauses, says trader, but the medium term outlook is bearish. Says EUR shorts may well scale down positions as the austerity package looks credible and as uncertainty gradually drops, especially if German lawmakers approve the deal. However, says the euro area still needs a weak currency and low key rate for long to survive. Thus targets 1.2500 in six months. EUR/USD stands now at 1.3235.

euro down trand

The Greek bail-out package may have been agreed over the weekend, but there are still reasons to believe in a stronger USD despite this solution, says trader. Says the balance sheet of the Fed is about to turn, ie the selling of mortgages and a decreased supply of dollars. Adds the market might want to hold on their dollars, which could be why the month end buying of EUR didn't occur this time. Thus doesn't see risk aversion being the only prime driver of the euro. EUR/USD now at 1.3232.