FOREX: EURO/USD

The EUR/USD lost nearly all of it gains today (Thursday the 4th Dec '09) with a loss of about 80 pips from its intraday highs. Today saw a lot of news coming out of both the Euro zone and the US. The Euro zone saw the ECB keep interest rates unchanged with Trichet explaining the outlook and future expectations. There was some volatility that accompanied the ECB announcement, after which markets quieted down dramatically. EUR/USD went into the press conference on a firm note, around 1.5120. Prices slumped to 1.5085 in one breath as Trichet said the ECB would offer full allotment for the last 12-month refi, but prices then soared to a session high of 1.5148 within 2 minutes as Trichet announced that the remaining long-term refi operation would be indexed to the minimum bid rate. Those gains were not sustain and prices soon slipped back below 1.5100.

EUR/USD slipped further after ISM service-sector data came in far weaker than expected. Dips were limited to 1.5060. Trading ranged in the 1.5085/95 region most of the afternoon before weakening with stocks late. Markets are waiting for tomorrows big data day, the NFP. The Euro forecast is bullish on extreme FX sentiment. The ratio of long to short positions in the EURUSD stands at -2.31, as nearly 70% of traders are short. In detail, short positions are 11% higher than yesterday and up nearly 17% since last week.
US unemployment claims came in at 457k, much lower than expected. Tomorrow sees the much anticipated non-farm payrolls data.