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EUR/USD  continues its climb after taking a break. The important GDP releases came out better than expected, and allow the common currency to tick higher after the big move higher seen yesterday. Deflation worries were put aside. Consumer confidence in the US is the main event to close the week with. Where will the pair end the week?

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

EUR/USD Technical

  • EUR/USD  traded steadily around 1.3670 before getting a boost from GDP numbers,.

Current range: 1.3650 to 1.37

Further levels in both directions:

EUR USD Technical Chart February 14 2014 forex trading currencies euro to dollar graph

  • Below: 1.3650, 1.3580, 1.3515, 1.3450, 1.34, 1.3320, 1.3295, 1.3175, 1.31 and 1.3050.
  • Above: 1.37, 1.38, 13915 and 1.40.
  • 1.3650 has switched to support as the euro moves higher. 1.3580 follows.
  • The round number of 1.37 is the next line of resistance. 1.38 is stronger.

 

EUR/USD Fundamentals

  • 6:30 French GDP. Exp. +0.2%, actual +0.3%.
  • 7:00 German GDP. Exp. +0.3%, actual +0.4%.
  • 7:45 French Non-Farm Payrolls. Exp. -0.1%. Actual +0.1%.
  • 9:00 Italian GDP. Exp. +0.1%. Actual +0.1%.
  • 10:00 Euro-zone GDP. Exp. +0.2%.
  • 10:00 Euro-zone trade balance. Exp. +14.5 billion.
  • 13:30 US Import prices. Exp. -0.1%.
  • 14:15 US Industrial Production. Exp. +0.2%.
  • 14:15 US Capacity Utilization Rate. Exp. 79.4%.
  • 14:55. US UoM Consumer Sentiment. Exp. 80.6 points.

*All times are GMT

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

EUR/USD Sentiment

  • Euro-zone growth beats expectations: Figures from both core countries and especially from Germany beat analysts’ expectations. While the EZ recovery still looks fragile, the German strength seems to lead the euro-zone forward, and France isn’t pulling it back anymore. The fragility of the recovery looks weaker.
  • ECB ready to act: An ECB member stated that the central bank is considering negative rates very seriously. These words weighed on the euro. In addition, the Bank’s monthly bulletin cut inflation forecasts from 1.5% to 1.1% in 2014. Draghi seemed confident that things will sort themselves out, but another fall in inflation could still trigger a move in March.
  • Weak US data: Retail sales fell in both January and December, lowering growth forecasts for both quarters. Bad weather was easily blamed, but perhaps the effect of the weather not that temporary (another storm hits the US) and perhaps the weakness is not only weather related. Convincing US figures are still missing.
  • Yellen  says tapers to  continue:  Testifying before Congress on Tuesday, new Fed chair  Janet  Yellen  didn’t generate much excitement in the markets. She said that the Fed plans to continue trimming QE, provided that the employment picture continues to improve and inflation rises. She acknowledged that  even though  the unemployment rate has improved steadily, the  recovery in the labor market is far from complete and  the Fed plans to keep interest rates at ultra-low levels. QE seems to be on track despite the weakness in recent US data. The Fed took its time with the taper decision and a terrible disappointment is needed in order to derail the taper train. The upcoming NFP will be closely watched.

More:  Analysis: ECB expects the situation to sort itself out, but things could still worsen