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By David Song, Currency Analyst Mon Sep 27 12:00:00 GMT 2010
Talking Points
DailyFX provides forex news on the economic reports and political events that influence the currency market.
Learn currency trading with a free practice account and charts from FXCM.
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* Euro slips, hurt by profit taking and downgrade
* Moody's cuts Anglo Irish Bank ratings
* CFTC data shows shift to euro longs
* Dollar holds above 84 yen JPY=
(Adds quote, updates prices)
By Tamawa Desai
LONDON, Sept 27 (Reuters) - The euro lost ground against the dollar on Monday after ratings firm Moody's cut Anglo Irish Bank's lower-grade debt and kept it on review for a downgrade, highlighting concerns over the euro zone banking sector.
The euro hit a session low of $1.3426 EUR=, and was down nearly 0.1 percent on the day at $1.3477 by 1133 GMT, off a five-month high of $1.3496 EUR= hit on Friday. Traders said stop losses were lined up below $1.3425.
Moody's cut the nationalised bank's senior unsecured debt by three notches to Baa3 -- just one notch above junk status -- and its subordinated debt by six notches to Caa1. [ID:nLDE68Q15A]
"The Moody's downgrade was moderately significant as it takes them ahead of others ... to one notch above junk, and it still remains under review," said Adam Cole, global head of FX strategy at RBC Capital Markets.
"With the prospect of more easing by the U.S. Federal Reserve priced in, the focus may move back to Europe."
The single currency had edged lower versus the dollar on profit-taking after gaining some 4 cents since last week, and after failing to break a barrier at $1.3500, traders said.
The euro's next key level was $1.3510, a 50 percent retracement of its fall from above $1.51 last November to its June low below $1.19.
Still, investors will be cautious about pushing the euro too high before banks repay 225 billion euros in European Central Bank loans. The tenders are due to expire this week, with banks preparing to repay 12-, six- and three-month funds on Thursday.
If the results highlight more banking sector troubles, traders may turn cautious on the euro, though other analysts say a withdrawal of funds from the system will boost lending rates and provide support for the single currency.
The latest data from the Commodity Futures Trading Commission showed currency speculators moved to a net long position in the euro for the first time this year. [IMM/FX]
*We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language or appear to be spam and review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters.
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After decades of trading commodities and options, traders often develop a master list of "Golden Rules" they strictly follow to maintain sustained trading success. Now, Trends in Futures newsletter editor George Kleinman provides access to his private collection of most treasured, most powerful trading precepts. Applicable to a variety of trading scenarios and market conditions, Kleinman shares his weapons for winning which include...Price: $64.95
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Fan YangCurrency Analyst, Commodity Trading AdvisorArticles by Author | Biography | ContactForex Trading Setup September 27, 2010
Tools:
Simple Moving Average(SMA) 50-period (red), 200-period (bold, gray)
RSI-14 with Simple Moving Average 5-period of RSI attached.
Fibonacci Study
Elliott Wave Principles
Market and Price Action (patterns, candlesticks)
Multiple Time-Frame Analysis Stalking EUR/GBP for Topping

Fan Yang CMT CTA
Currency Analyst
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analyses.
All screenshots are made from VT Trader 2.0 and are of actual market data at the time of the screenshot.
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OSAKA (Dow Jones)--Bank of Japan Gov. Masaaki Shirakawa said Monday that the central bank will look into the impact of the yen's rise on the nation's economy at a policy board meeting next ...