EUR/USD is trading in an almost perfect manner in a higher range, dismissing bad news regarding the debt crisis and awaiting key US data that promises a strong ending to the week. Here’s a quick update on technicals, fundamentals and sentiment currently moving the markets.
EUR/USD Technicals
- Asian session: Euro/Dollar traded around 1.45, then made a dip but bounced exactly at the 1.4450 line.
- Current range – 1.4450 – 1.4520
- Further levels in both directions: Below 1.4450, 1.4380, 1.4282, 1.4160, 1.4030, 1.3950, 1.3860, 1.3760
- Above: 1.4520, 1.4580, 1.48, 1.50, 1.5144
- 1.4520 proved to be a tough line, over and over again.
- 1.4450 now works as excellent support, switching roles from yesterday. 1.4380 is stronger below..
Euro/Dollar on high support – click on the graph to enlarge.
EUR/USD Fundamentals –
- 9:00 European CPI. Exp. +2.6%. Core CPI exp. +1.1%. Actual, +2.7% and 1.3% respectively – higher than expected.
- 9:00 European Trade Balance. Exp. -3.4 billion. Actual -2.4 billion – better than expected.
- 12:30 US CPI. Exp. 0.5%. Core CPI exp. +0.2%. See how to trade EUR/USD on this event.
- 12:30 US Empire State Manufacturing Index. Exp. 17.1 points.
- 13:00 US TIC Long-Term Purchases. Exp. 60 billion.
- 13:15 US Industrial Production. Exp. +0.5%.
- 13:15 US Capacity Utilization Rate. Exp. 77.5%.
- 14:55 US Consumer Sentiment. Exp. 68.7 points.
- 15:15 US FOMC member Charles Evans talks.
* All times are GMT.
For more events later in the week, see the EUR/USD forecast
EUR/USD Sentiment
- Another downgrade for Ireland: Moody’s downgrades Ireland once again. The markets aren’t excited.
- China continues growing: The economic giant from the east posted strong growth, 9.7%, and strong inflation, 5.4%. It continues to “export” this inflation, whereas Europe “imports” it. Expectations regarding rate hikes in Europe are increasing once again, and this supports the Euro.
- Default for Greece?: German Finance Minister retreated from his comments on a Greek default, but it’s quite evident that this will happen. Greek yields are touching the skies..
- Bailout for Portugal – There’s no government in Lisbon, making it hard to agree on a bailout program. In addition, the outcome of the Greek bailout poses doubts about the chances of successful move in Portugal. Portuguese yields already passed the 9% mark. See more about The Portuguese bailout
- Fed forced to act on the rates: US CPI will show if inflation is becoming a problem in the US as well. Probably not.After a few recent hawkish speeches we got some doves. This release today will definitely impact the FOMC meeting in two weeks time. Yesterday’s PPI and jobless claims showed that there’s no rush.
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