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EUR/USD  has finally made it above the very tough 1.33 level, reaching levels last seen back in June. It is now eyeing the high resistance level of 1.3350 and seems hesitant. The main driver comes from the absence of pro QE tapering news from the US. Without any bullish news, the dollar retreats and the euro enjoys it. Also strong German data  helps the euro.  Can a good jobless claims figure change the picture?  

Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.

EUR/USD Technical

  • Asian session: Euro/dollar  remained very close to 1.3350 throughout the session.

Current range: 1.33 to 1.3350.

Further levels in both directions:  EUR to USD technical analysis August 8 2013 for currency trading forex fundamental outlook and sentiment

  • Below: 1.33, 1.3255, 1.3175, 1.31, 1.3050 and 1.30.
  • Above: 1.3350, 1.3415, 1.3480 and 1.3520.
  • 1.3255 is providing weak support. 1.31 is stronger.
  • 1.3350 is the key level on the upside.

EUR/USD Fundamentals

For more events and lines, see the  Euro to dollar forecast.

EUR/USD Sentiment

  • Strong German data: the better than expected trade surplus joined a big rise in industrial production for the zone’s locomotive. Germany enjoyed a rise of 2.4% in industrial output during June, better than 0.3% expected. The GDP expectations are now very high. But can Germany pull the euro-zone out of recession? This is still very questionable.
  • No news is bad news for the dollar: After job openings exceeded expectation  and the US trade deficit also came out better than expected (supporting GDP), the lack of any bullish turned into bearishness, and the USD sold off across the board. This helped EUR/USD settle above 1.33.
  • Evans shows hawkishness: A usually dovish FOMC member, Charles Evans, made remarks showing that QE tapering is certainly on the cards for September. This is certainly dollar positive. This comes after the Fed made no real policy changes and after Bernanke said that  the Fed is not on a “preset course”.
  • Italy – slower downfall, no growth yet: The euro-zone’s third largest  contracted for the 8th consecutive quarter, but at least the level of contraction was lower: only 0.2% instead of 0.4%. Signs from Germany and France were positive, but there is doubt that the euro-zone as a whole has returned to growth.
  • Downward bias from the ECB: While  Mario Draghi was relatively upbeat  and acknowledged the green shoots in Europe, the bias certainly remains dovish, and yet another ECB member reminded us that rates could go down from here, and that the ECB still “has more ammunition”.

Technical:  EURUSD: Continues To Retain Its Broader Upside Tone