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EUR/USD  continues  to advance, riding on the dollar’s weakness. OK jobless claims and the lowest 4 week moving average for these claims was not enough to help the dollar, that extended its falls. As this summer week draws to a close, the calendar is quite light and so is trading volume. Will the pair challenge the June peak of 1.3415 before the week ends?

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

EUR/USD Technical

  • Asian session: Euro/dollar retreated at the round 1.34 number and didn’t proceed from there.

Current range: 1.3350 to 1.3415.

Further levels in both directions:  EURUSD Technical Analysis August 9 2013 fundamental outlook and sentiment

  • Below: 1.3350, 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.
  • 1.3415, the June peak is now strong resistance just above the round 1.34.

EUR/USD Fundamentals

  • 6:45 French Industrial Production. Exp. +0.3%. Actual: -1.4%.
  • 14:00 US  Wholesale Inventories. Exp. +0.5%.

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

EUR/USD Sentiment

  • No news is bad news for the dollar: All in all, US data continues to be positive, but this doesn’t help. The latest was a weekly jobless claims number of 333K, within expectations. The 4 week moving average dropped to 330K, the lowest since 2007. Only continuing claims disappointed with a rise over 3 million. This wasn’t enough for the USD, which continued dropping across the board.
  • Strong German data: 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. We will get various GDP numbers on Wednesday.
  • Evans and Fisher Septaper talk: 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. Also Fisher said that the “Fed is likely to taper in September”, but he is a known hawk. This comes after the Fed made no real policy changes and after Bernanke said that  the Fed is not on a “preset course”. Is tapering already priced in?
  • Lower volume: We are already deep into August, and trading volume has fallen. Fridays are notorious for last minute positioning, so caution is warranted.

Technical:  EUR/USD Advances to Major 1.3400 Resistance