EUR/USD, opens the new trading week very quietly, making an initial dip and recovering over the 1.28 line once again. Many financial centers are still closed for the Easter holiday. More action is expected in the US session, when the ISM Manufacturing PMI is released – it is the first hint towards the Non-Farm Payrolls. The rest of the week is already packed with top tier events, including the euro-zone rate decision.
Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.
- Asian session: Euro/dollar opened with a drop to 1.2771 before coming back to trade above 1.28..
- Current range: 1.2805 to 1.2880
- Below: 1.2805, 1.2746, 1.27, 1.2660 and 1.2587.
- Above: 1.2880, 1.2960, 1.3000, 1.3100, 1.3130 and 1.3170.
- 1.2805 is providing weak support to the pair. 1.2746 is stronger.
- 1.2880 is the next resistance line.
Euro opens the week steadily– click on the graph to enlarge.
- 13:00 US Final Manufacturing PMI, exp. 55 points.
- 14:00 US ISM Manufacturing PMI, exp. 54.2 points.
- 14:00 US Construction Spending, exp. +1.1%.
For more events and lines, see the Euro to dollar forecast
- Cyprus – details about the haircut and corruption allegations: Capital controls are still in place in Cyprus. Over the weekend, authorities revealed the plan for taxing around 60% of the money on big accounts (above 100K) in the Bank of Cyprus. In addition, a newspaper in Cyprus published that a company owned by relatives of the president withdrew large sums of money prior to the initial bailout announcement. President Anastasiades asked to investigate it.
- Italian Political Crisis Continues: After coalition talks failed, the president reportedly considered resigning in order to accelerate the path to fresh elections. However, and perhaps due to pressure from ECB president Mario Draghi, president Napolitano appointed committees including some politicians from mainstream parties (as well as others) in order to try and find another political solution. Also Italy’s small neighbor, Slovenia, has some issues. Here is some background about Slovenia.
- Which way Germany?: Mario Draghi is exuding confidence that the Eurozone economy will improve later in 2013, but that certainly won’t happen if the German economy doesn’t lead the way. However, German data has been a mix recently, and this was underscored in Thursday’s releases. Retail Sales rose 0.5%, blowing past the estimate of a 0.4% decline. However, Unemployment Change hit a five-month high, jumping to 13 thousand. This was a major disappointment, as the markets had anticipated a respectable drop of 2 thousand. Unemployment was unchanged at 6.9%.
- US data disappoints: There were two major housing releases last week, and hopes of strong numbers were dashed. New Home Sales fell sharply from 437 thousand to 411 thousand, well below expectations. Pending Home Sales, also looked weak, declining 0.4%. Unemployment Claims have looked sharp over the past four weeks, but slumped this time around, coming in at 357 thousand, well above the estimate of 340 thousand. Final GDP rose 0.4%, missing the forecast of 0.5%. The bigger figures are due this week: ISM PMIs, ADP and finally the Non-Farm Payrolls.