EURUSD: Buy the Rumor, Sell the News Indeed

by Justin Bennett  · 

May 8, 2017

by Justin Bennett  · 

May 8, 2017

by Justin Bennett  · 

May 8, 2017


Over the weekend I presented the idea that market participants could react in a “buy the rumor, sell the news” manner following Sunday’s Macron victory in France. Given the 270 pip rally since April 21st, the idea of a EURUSD selloff this week was certainly plausible.

Now that participants have had some time to digest the weekend volatility, it appears that selling the news was indeed the way to go. After gapping up 20 pips to 1.1019 on Monday, the single currency has reversed course and has now closed back below 1.0950 on a 4-hour closing basis.

As long as 1.0950 holds as new resistance, there’s a good chance we’ll see the EURUSD slide lower toward 1.0860. But a lack of market moving data could also lead to some indecisiveness over the next few sessions.

We may have to wait until later this week when we get the latest U.S. PPI and CPI figures before we see this range break down. Friday’s U.S. retail sales could also play a part in the dollar’s path forward.

Then again, something as simple as a reversion to the mean could easily take the Euro back to 1.0860 against the greenback. On the weekly chart, that reversion could even extend to the April 20th high at 1.0775.

From a purely technical standpoint, if sellers manage a daily close (5 pm EST) below 1.0950, a move lower toward 1.0860 and perhaps 1.0775 seems likely.

Buyers have a harder task ahead of them to extend last week’s rally. To do that they not only need a daily close above 1.0950 but they’re going to need to take out the 1.1025 handle as well.

That doesn’t seem likely given today’s price action. So for now, the path of least resistance appears to be a move toward 1.0860.

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EURUSD range


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  1. Yesterday I trade in Call position on the pair EUR/USS, but unfortunately, my prediction ends up miserable.

  2. Yesterday I trade in Call position on the pair EUR/USS, but unfortunately, my prediction ends up miserably.

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