EUR/USD began the trading week with a firmer tone, moving higher as no indicators are released. The quiet atmosphere certainly helps the common currency which managed to edge up in range, but hasn’t made a big move so far. Can the pair break higher when data is released?
Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.
- Asian session: Euro/dollar traded quietly just above 1.33, and moved higher afterwards.
Current range: 1.3280 to 1.3350.
- Below: 1.3280, 1.3255, 1.3175, 1.31, 1.3050 and 1.30.
- Above: 1.3350, 1.3415, 1.3480 and 1.3520.
- 1.33 now switches to support.
- 1.3415, the June peak is now strong resistance just above the round 1.34.
- Nothing on the radar today.
For more events and lines, see the Euro to dollar forecast.
- Rising chances for Summers to head the Fed: Media reports in the US continue talking about Larry Summers as the leading candidate to lead the Federal Reserve after Bernanke. An announcement is expected during the autumn.
- Important data Septaper supportive: Inflation figures came out as expected and pointed to 2% YoY in CPI and 1.7% in core CPI. This should be enough for the Fed. In addition, jobless claims fell to a new multi-year low of 320K. Excellent pro-dollar news. However, tapering remains a close call for both the Fed and the markets and the follow up after the Philly number was totally different.
- Strong core weak periphery: The euro isn’t riding on the good data, and for a reason. Germany and France lead the euro-zone together once again. The news from France is especially encouraging. However, Italy and Spain are still in recession. Can this imbalance continue for a long time? Here are 4 reasons why the euro-zone is out of recession, but not out of the woods.
- Some improvement in Greece: While unemployment is horrible (around 64% of youth are without jobs), Greece reported a significant rise in tourism during June. Hopefully also July and August will see positive data.
- Lower volume: We are already deep into August, and trading volume has fallen. Mondays are more quiet, and things should heat up afterwards.
More technical analysis:Get the 5 most predictable currency pairs