EUR/USD posted modest losses on Wednesday, but has settled down in Thursday trading. The pair is trading slightly over the 1.31 level in the European session. On Wednesday, US Federal Reserve head Bernard Bernanke testified in Washington, and reiterated that QE tapering will depend on how well the US economy is performing. US releases disappointed on Wednesday, as Building Permits and Housing Starts both missed their estimates. Taking a look at Thursday’s releases, Eurozone Current Account fell short of the estimate, and Spanish 10-year bond yields showed little change. In the US, Bernanke will testify before the US Senate Banking Committee. There are two major releases out of the US – Unemployment Claims and the Philly Fed Manufacturing Index. Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar. EUR/USD Technical Asian session: Euro/dollar edged lower, dropping below the 1.31 line as it touched a low of 1.3091. The pair consolidated at 1.3101. In the European session, Euro/dollar has moved slightly higher. Current range: 1.31 to 1.3160. Further levels in both directions: Below: 1.31, 1.3050, 1.30, 1.2940, 1.2890, 1.2840, 1.28, 1.2750, 1.27, 1.2660 and 1.26. Above: 1.3160, 1.32, 1.3255, 1.3350 and 1.34. On the downside, 1.31 is under strong pressure. 1.3050 is next. 1.3160 is providing resistance. The round number of 1.32 follows. EUR/USD settles down after losses following Bernanke testimony – click on the graph to enlarge. EUR/USD Fundamentals 8:00 Eurozone Current Account, exp. 21.3B, actual 19.6B. 8:54 Spanish 10-year Bond Auction, actual 4.72%. 12:30 US Unemployment Claims, exp. 344K. 14:00 US Fed Chairman Bernard Bernanke Speaks. Bernanke will testify before the Senate Banking Committee in Washington. 14:00 US Philly Fed Manufacturing Index, exp. 8.5 points. 14:30 US CB Leading Index, exp. 0.3%. 14:30 US Natural Gas Storage, exp. 63B. For more events and lines, see the Euro to dollar forecast. EUR/USD Sentiment Bernanke says tapering could be delayed: The markets eagerly awaited US Federal Reserve head Bernard Bernanke’s testimony in Washington on Wednesday, but there were no fireworks or dramatic announcements. Rather, Bernanke served essentially the same dish we’ve seen before, when it came to QE tapering. The Fed chief said that pace of bond buys is “not on a preset course“, a vague statement leaving the Fed plenty of wiggle room to scale down QE should it choose to do so. Bernanke reiterated that a decision to taper QE would depend on economic conditions. He noted that present unemployment levels (7.6%) were “well above” normal levels, and shied away from presenting any time deadlines for scaling down QE. So the markets were left with the message that any tapering will be delayed until the recovery deepens and unemployment falls. Bernanke will continue his testimony before a Senate committee on Thursday, and we can expect to hear more of the same. US inflation could push back tapering: One of the topics that Bernanke didn’t mention too strongly in his recent statement was inflation. The intent to taper bond buys while inflation is falling caused FOMC member James Bullard to dissent. If inflation falls below 1%, it will be hard to move forward on tapering in September. German locomotive having trouble getting on track: German numbers continue to be a source of concern. On Tuesday, German ZEW Economic Sentiment, one of the most important German releases, was a disappointment. The indicator dropped and fell below expectations. Last week, German Trade Balance and Industrial Production both missed their estimates. The number one economy in Europe may be in better economic shape than its struggling neighbors, but the Eurozone needs a strong German economy to lead the way to recovery. Spain in political crisis: Spain never seems to be too far from the headlines, as the country has its fair share and more of political and economic challenges. This time it’s a political scandal which has made its way to the very top, potentially implicating Prime Minister Mariano Rajoy. The ex-treasurer of the ruling PP party has testified that he paid Rajoy and other members substantial sums from a slush fund that was funded by various companies. The scandal has been in the press for months, and is intensifying. The crisis could throw the country into turmoil, and do some damage to the euro. ECB says low rates to continue: Most ECB members repeated the stance that rates could remain low for a long time, or even move lower. A negative deposit rate is still on the cards. However, German ECB members differ. While Bundesbank chief Jens Weidmann said that low rates are bad for the euro, his colleague Asmussen said that the extended period of time is more than 12 months. He later backtracked. In any case, the sentiment is dovish regarding rates. Recent technical analysis articles: EUR/USD Could Retest 1.3220 – Elliott Wave Forecast Kenny Fisher Kenny Fisher Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer. Kenny's Google Profile View All Post By Kenny Fisher EUR/USD DailyForex News Today: Daily Trading News share Read Next EURJPY: Sets For More Upside FX Tech Strategy 9 years EUR/USD posted modest losses on Wednesday, but has settled down in Thursday trading. The pair is trading slightly over the 1.31 level in the European session. On Wednesday, US Federal Reserve head Bernard Bernanke testified in Washington, and reiterated that QE tapering will depend on how well the US economy is performing. US releases disappointed on Wednesday, as Building Permits and Housing Starts both missed their estimates. Taking a look at Thursday's releases, Eurozone Current Account fell short of the estimate, and Spanish 10-year bond yields showed little change. 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