EUR/USD Apr. 21 – Celebrating on Dollar Weakness

EUR/USD is riding on the dollar’s weakness across the board and breaks resistance to 16 month highs, despite worries about a Greek default. The short week ends with  some major  indicators. Will we see consolidation or a break of higher resistance?  Here’s a quick update on technicals, fundamentals and what’s going on in the markets.

EUR/USD Technicals

• Asian session:  Active session sees the pair settle above 1.4520, and then easily break above 1.4580. Move upwards continued in European session.
• Current range –  1.4580 – 1.47

• Further levels in both directions: Below 1.4580, 1.4520, 1.4450, 1.4375, 1.4282, 1.4160, 1.4030, 1.3950, 1.3860, 1.3760. 1.37, 1.3440.
• Above:   1.47, 1.48, 1.50, 1.5144
• Resistance is only at 1.47, after previous lines have been left behind.
• While 1.4580 was easily broken as resistance, it will likely work better as support if Euro/Dollar consolidates its gains.

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

EUR/USD Fundamentals –

• 8:00  German Ifo Business Climate. Exp. 110.6. Actual 110.4 – Within expectations, provides solid ground for Euro rises.
• 12:30 US Unemployment Claims. Exp. 394K. See how to trade USD/JPY around this event.
  
• 13:00 Belgian  NBB Business Climate. Exp. +5.9 points.
• 14:00 US  Philly Fed Manufacturing Index. Exp. 37.1 points.

* All times are GMT.

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

EUR/USD Sentiment

• Default for Greece over the weekend?: There are strong rumors in the market regarding a “restructuring” for Greece during the long Easter weekend. Such a precedent could have a horrible snowball effect all over the continent, stronger than the bailouts.
• S&P credit warning for the US: It’s quite rare seeing a credit warning for the world’s no. 1 superpower. This shocking event hurt USD/JPY at first, but now it reaches all currencies, with the Swiss franc and the Australian dollar breaking records. Also the Euro and the pound enjoy this weakness.
• Bailout for Portugal – Portuguese yields stand at almost 9.50% at the time of writing. The lack of an operating government in Lisbon prevents a quick resolution to this unsustainable situation. Will Portugal follow Greece with a default?
• Gold and silver continue higher: Gold is already above $1500 and silver above $45. This adds to the dollar’s weakness.