EUR/USD Jan. 7 – On the Edge

EUR/USD lost more support and is now hovering just above levels last seen 4 months ago. With Non-Farm Payrolls (and other releases), we’re up for a grand finale for the week. Here’s a quick update on technicals, fundamentals and community trends. EUR/USD Technicals

• Asian session:  Narrow range between 1.2970 to 1.3025.
• Current Range between 1.2970 and 1.3080



• Further levels in both directions: Below    1.2970, 1.2920, 1.2722, 1.2587.  Above   1.3080,  1.3180, 1.3267, 1.3334, 1.3440, 1.3576,  1.37, 1.3786,  1.3950 and 1.4030.
• 1.3440 is important resistance above.
• 1.2970 is was the lowest level in 4 months, and it’s a critical support line. Next significant support is only at 1.2722.

Euro/Dollar trending down- click to enlarge graph

EUR/USD Fundamentals –

• 7:00 German Retail Sales. Exp. +0.6%. Actual -2.4%. Another burden on the Euro.
• 7:00 German Trade Balance. Exp. +14.5 billion, actual 11.8 billion.
• 9:00 ECB President Jean-Claude Trichet talks.
• 10:00 European Unemployment Rate. Exp. 10.1%.
• 10:00 European Final GDP (Q3). Exp. +0.4%.
• 11:00 German Industrial Production. Exp. -0.1%.
• 13:30 US Non-Farm Payrolls. Exp. 160-200K. Expectations became very high.
• 13:30 US Unemployment Rate. Exp. 9.7%.
• 14:30 Federal Reserve chairman Ben Bernanke talks.

* All times are GMT.

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

EUR/USD Sentiment

• There are very high hopes for the Non-Farm Payrolls, the king of forex. These expectations grew after this week’s great American figures. Are the expectations too high now? Here’s the Non-Farm Payrolls preview.
• US figures were great so far, both ADP and Services PMI exceeded expectations and pushed the dollar higher.
• Inflation is becoming problematic for Europe. This comes as employment is still high. Double trouble for Europe.
• A consultation paper about defaulting of banks stirs the markets. Greece is denying talks about default, but the European Commission is pushing through with it. Irish Banks also endangered.
• Greece is denying the chances of a default – too much smoke without fire.

Currensee Community: 47% are long , 53% are short, more than yesterday. These are 1312 open positions in real accounts trading this pair at the moment.