Forex Trading Live Update, Tuesday 26th June

by Joe Oliver, Forex Trading-Pips

Euro currency traded close to two week lows on Tuesday morning, firing off short on the daily squeeze consolidation of the past 6 trading sessions. Moving average indicators are pointing down despite the recent bounce, resistance at 1.2800 support at 1.2288.  A retest of the swing low at 1.2288 is now likely.

EUR currency daily squeeze

EUR currency daily squeeze

On June 28 European leaders will meet at the EU summit in Brussels. Germany remains opposed to any form of debt common liability agreement –¬†German Chancellor Angela Merkel stated that such measures would be “wrong and counter-productive”. Over the weekend Billionaire investor George Soros called on Europe to start a fund to buy Italian and Spanish bonds, warning that a failure by leaders meeting this week to produce drastic measures could turn into a ‘fiasco that could actually be fatal’.

On Monday the Japanese yen formed a large downside reversal taking out gains made over the prior two trading sessions and putting the pair back under the 50 day EMA (exponential moving average). Strengthening of the Japanese Yen versus the US dollar is indicative of risk aversion as investors shift funds out of risk currencies ahead of the EU meetings.

JPY daily downside reversal

JPY daily downside reversal