EUR/USD Apr. 11 – Settling Above High Support as Hawks

EUR/USD starts the week with calm trading above high support, consolidating the gains from Friday’s rally. We have quite a few speeches to start the week, with contradicting messages expected. Is it getting ready for the next move? Or will it retreat from this point?  Here’s a quick update on technicals, fundamentals and community trends.

EUR/USD Technicals

• Asian session:  Quiet session between 1.4450 and 1.4490.
• Current range –  1.4450 – 1.4480.

• Further levels in both directions: Below 1.4450, 1.4282, 1.4160, 1.4030, 1.3950, 1.3860, 1.3760
• Above:    1.4580, 1.48, 1.50, 1.5144
• 1.4450 now turns into significant support, after being broken late on Friday..
• Strong resistance is at 1.4580, but it’s still far from current level.

Euro/Dollar on high support  – click on the graph to enlarge.

EUR/USD Fundamentals –

• 6:45  French Industrial Production. Exp. +0.5%. Actual +0.4%.
• 9:15 US FOMC William Dudley talks. Exp. dovish.
• 15:00 US FOMC member Charles  Evans talks. Exp. hawkish.
• 15:30 ECB member Axel Weber talks. Exp. hawkish.
• 16:15 US FOMC member Janet Yellen talks. Exp. dovish.

* All times are GMT.

For more events later in the week, see the  EUR/USD forecast

EUR/USD Sentiment

• US Government Shutdown: This was the driver for the extra strong rally on Friday. But now, as a resolution was found, the dollar refuses to recover. At least the downfall stopped.
• First rate hike in two years: Indeed, the European Central Bank made a move on the rates. Trichet raised the rate to 1.25% and hinted that another moves isn’t coming in the next meeting, but won’t be ruled out. The initial reaction was bad for the Euro,as the market expected him to be more hawkish and to hint more rate hikes.
• Bailout for Portugal – The details of a bailout for Portugal are starting to emerge, and there’s a lot of talk that Portugal will be the last country to receive a bailout. Indeed, Spanish yields are lower, meaning that the market is more confident about Spain. See more about The Portuguese bailout
• Fed becoming hawkish:  After a few  recent hawkish speeches we now hear from the doves in the Federal Reserve. Dudley and Yellen are definitely in the dovish camp. We’ve heard them recently and they’ll speak again now.
• Libyan ceasefire? A delegation from the African Union said that Libya’s ruler Muammar Gaddafi has agreed to a ceasefire. They now seek an approval from the rebels in Benghazi, but these will find it hard to accept any deal that leaves Gaddafi in power. The price of oil is still high, with WTI at $1112, and this weighs heavily on the US dollar.

Currensee Community: 52% are long , 48% are short. These are 804 open positions in real accounts trading this pair at the moment.