EUR/USD Feb 2 – Consolidating After Breakout

EUR/USD is taking a break from rising after the big breakout yesterday. Today we get more hints towards the NFP. Where will it go?  Here’s a quick update on technicals, fundamentals and community trends.

EUR/USD Technicals

• Asian session:  Peaked at 1.3861 before dropping.
• Current range – 1.3760 to 1.3830.

• Further levels in both directions: Below    1.37, 1.3576, 1.3440, 1.3334, 1.3267, 1.3180, 1.3080, 1.2970.
• Above: 1.3830,  1.3950, 1.4030, 1.4160 and 1.4230.
• 1.3760 turns into significant support after the breakout.
• 1.40 is next big target, although resistance appears under and above this line.

Euro/Dollar manages taking a break after breakout- click on the graph to enlarge.

EUR/USD Fundamentals –

• 10:00 European PPI. Exp. +0.8%. Actual +0.8%.
• 12:30 US Challenger Job Cuts.
• 13:15 ADP Non-Farm Employment Change. Exp. 148K.

* All times are GMT.

For more events later in the week, see the  EUR/USD forecast

EUR/USD Sentiment

• Egyptian crisis winding down after Mubarak said he’ll step down in September. The masses want him to go now, but tensions have calmed.  The Egyptian army abandoned president Mubarak.
• Greek default? Plans are drawn for a making a 25% haircut on Greek debt, codenamed “Brady plan”. This has been overshadowed by the events in Egypt.
• S&P downgraded Ireland’s credit rating. Unsurprising, but a reminder that the crisis isn’t over.
• Spanish bond yields are falling sharply to 5.10% – this is big boost for the Euro.
• Inflation is becoming problematic for Europe. This comes as employment is still high. Double trouble for Europe. Trichet showed concerns about inflation and boosted the Euro. It already reached 2.4%. Today the bears will probably be reinforced with the bad unemployment rate.

Currensee Community: 63% are long , 37% are short. These are 1369 open positions in real accounts trading this pair at the moment.