Quantum-Forex

The EUR continues to strengthen, supported by equity market rallies and declining VIX, traders are looking to build long positions in the EUR.   Comments by Bernanke and Trichet have added to the growing optimism surrounding the global recovery. Whilst acknowledging the uncertainty in the market, Bernanke talked up the USD yesterday, maintaining that “the USD will be strong because the US economy is strong”.

Jean-Claude Trichet commented yesterday that the global downturn had bottomed with some large economies already on the path to recovery.   Risk appetite among investors is improving, risk-correlated assets has seen large rallies in the past few weeks and global markets to continue to outperform.   We are still far from concluding that this will be a “V” shaped recovery.   

The Yen continued its gain against the dollar, we still wait for some consolidation and confirmation before entering this trade again.  After a brief retracement and some consolidation in EurUsd we continue to aim for 1.3740 area, a break past this level would make 1.3950 a likely target. We find initial support at 1.3557.