EUR/USD Apr. 19 – Recovering After Strong PMI Figures

EUR/USD is moving higher towards the old resistance line, after getting a boost from strong PMI figures. It’s still well below levels seen last week, despite the credit warning for the US and due to the imminent Greek default.  Here’s a quick update on technicals, fundamentals and what’s going on in the markets.

EUR/USD Technicals

• Asian session:  Euro/Dollar traded in a low and narrow range above 1.42. The rise began afterwards.
• Current range –  1.4160 – 1.4282

• Further levels in both directions: Below 1.4160, 1.4030, 1.3950, 1.3860, 1.3760. 1.37, 1.3440.
• Above:   1.4282, 1.4375, 1.4450, 1.4520, 1.4580, 1.48, 1.50, 1.5144
• 1.4282, which was the peak in November and capped the pair recently, now works as tough resistance once again.
• 1.4160, which was a pivotal line in the lower range, is now strong support once again.

Euro/Dollar looking to move higher  – click on the graph to enlarge.

EUR/USD Fundamentals –

• 7:00  French Flash Services PMI. Exp. 60.1 points. Actual 63. 4. Significant surprise
• 7:00  French Flash Manufacturing PMI. Exp. 55.2, actual 56.9.
• 7:30  German Flash Services PMI. Exp. 59.9. Actual, 57.7. Disappointment.
• 7:30  German Flash Manufacturing PMI. Exp. 60.1. Actual 61.7. Strong figure.
• 8:00 All-European  Flash Manufacturing PMI. Exp. 57.2. Actual 57.7 points. Overall improvement, also in the smaller countries.
• 8:00 All-European  Flash Services PMI. Exp. 57. Actual 56.9.
• 8:00 European Current Account. Exp. -2.3 billion. Actual -7.2.
• 12:30 US  Building Permits. Exp. 550K.
• 12:30 US Housing Starts. Exp. 530K.

* All times are GMT.

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

EUR/USD Sentiment

• S&P credit warning for the US: The rating agency warned that the US could see a credit downgrade in the future, if it doesn’t take care of its debt. This shocker was mostly felt in USD/JPY, but also helped EUR/USD stabilize. Reactions to this move will continue shaking the markets.
• Default for Greece?: More rumors about an imminent restructuring / default for Greece continues to weigh on the Euro. This is constantly denied, but the path is clear. A default will be a precedent that could impact other countries. As we’ve seen with Portugal, the denial of the bailout led to a bailout…
  
• 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
• Finnish elections: Anti-European parties made serious gains in Finland, meaning that the bailout for Portugal and other European moves could meet a strong hurdle from this strong, rich country. But as we’ve seen with Ireland, there’s a big gap between the pre-election promises and reality.