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EUR/USD falls to the middle of the range as the focus shifts from the upcoming rate hike on Thursday to fresh, ever-flowing debt worries. Will it shift lower?  Here’s a quick update on technicals, fundamentals and community trends.

EUR/USD Technicals

  • Asian session:  Quiet session sees narrow range trading in higher range.
  • Current range – 1.4160 – 1.4282

EUR USD Technical Analysis April 5

  • Further levels in both directions: Below 1.4160, 1.4030, 1.3950, 1.3860, 1.3760, 1.37, 1.3610, 1.35, 1.3440, 1.3334, 1.3267, 1.3180, 1.3080, 1.2970.
  • Above:    1.4282, 1.4450, 1.4580, 1.48, 1.50.
  • EUR/USD began the week by getting closer to the almighty 1.4282 line, but couldn’t really reach it..
  • 1.4160 is immediate support, but 1.4030, the important support line is the bottom border of the range is much more important.

Euro/Dollar dropping to mid range  – click on the graph to enlarge.

EUR/USD Fundamentals –

  • 8:00 European  Final Services PMI. Exp. 56.9 points.
  • 9:00 European  Retail Sales. Exp. +0.1%.
  • 14:00 US  ISM Non-Manufacturing PMI. Exp. 59.8 points.
  • 15:15 US FOMC member  Charles Plosser. Exp. hawkish comments.
  • 18:00 US  FOMC Meeting Minutes.

* All times are GMT.

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

EUR/USD Sentiment

  • Bailout for Portugal – Portugal got another credit downgrade, that includes a call for Portugal to seek aid. After the Portuguese government collapsed, the recent credit downgrades by Moody’s, Fitch and S&P and the yields that are over the roof, ECB member Evald Nowotny made an open call for a bailout. This isn’t good for the Euro and it will be hard to negotiate when there’s no government in Lisbon. Yields continue to rise.
  • Dovish Dudley is dominant:  Many Fed official spoke out about stopping QE2 and already two members Charles Plosser and Narayana Kocherlakota talking about rasising the rates. This dollar bullish tone was shattered by William Dudley, a senior member who was very worried about the economy.The hawks at the Fed still don’t match Trichet, but the tone is definitely shifting and helping the dollar. Also Ben Bernanke repeated the same cautious stance. It seems that the hawks are many, but the important people are doves.
  • Non-Farm Payrolls Shine: The American labor market is improving  – this gives a boost to the dollar. Gains in jobs + a fall in the unemployment rate were positive signs.
  • Greek Default: Over the weekend, there was a report that the IMF is pushing Greece to “restructure” its debt. This triggered denials, which probably means that we’re getting closer to a default…
  • European officials state rate hike is underway:  European central bankers make their message very clear – the rate is going to rise. These talks  sent the Euro higher, and they join the mix of European talks. The rate decision happens on Thursday, and is a key event for the Euro. Will we have a “buy the rumor, sell the fact” scenario?

Currensee Community: 52% are long , 48% are short. These are 648 open positions in real accounts trading this pair at the moment.