EUR/USD Apr. 20 – Surging Forward On Risk Appetite

EUR/USD is ignoring weak German PPI and Greek fears and prefers to ride forward on  US earnings and the US fiscal trouble. The pair is approaching the next resistance line. Where will it go from here?  Here’s a quick update on technicals, fundamentals and what’s going on in the markets.

EUR/USD Technicals

• Asian session:  Euro/Dollar saw an active session, breaking above 1.4375 and moving higher afterwards.
• Current range –  1.4375 – 1.4450

• Further levels in both directions: Below 1.4375, 1.4282, 1.4160, 1.4030, 1.3950, 1.3860, 1.3760. 1.37, 1.3440.
• Above:   1.4450, 1.4520, 1.4580, 1.48, 1.50, 1.5144
• 1.4450 is only a minor resistance line (and getting close now). The notable line to watch is 1.4520, which was a recent peak – the highest level in 15 months.
• 1.4282 is of important support below, as ranges widen.

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

EUR/USD Fundamentals –

• 6:00 German PPI. Exp. +0.8%. Actual +0.4% – Significantly weak.
• 14:00 US  Existing Home Sales. Exp. 5.05 million. See how to trade USD/JPY around this release.

* All times are GMT.

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

EUR/USD Sentiment

• Good American corporate earning: A big bulk of earnings reports was released – Yahoo, Intel and IBM all beat expectations, providing a boost for the stock markets – helping the Euro gain. The correlation is stronger these.
• S&P credit warning for the US: It’s quite rare seeing a credit warning for the world’s no. 1 superpower, but this shocker weakened the dollar – especially against the yen at first, but it’s now felt in EUR/USD as well.
• Default for Greece?: Discussions about restructuring are going on, and are being denied, although reports are emerging about such a precedent that could have severe implications. Read more about the possibility of a Greek default and the ongoing denials.
  
• 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. Portuguese bond yields are at 9.12% – this shows the severe lack of confidence that the market has in the ability of Portugal to pay back, even after the official request for a bailout. Spanish yields are around 5.50%.