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EUR/USD  is treading softly and trading quietly at the start of the new trading week. The euro posted sharp gains on Thursday but has shown little movement since then.  In Monday’s European session, EUR/USD is trading just  below the 1.33 line. Will  the pair  make an upwards move and cross above this level? Monday  greets  the markets with  a very light schedule, with the  sole release being US Pending Home  Sales. The US   ended a mixed week on  positive note, as US  UoM Consumer Sentiment  climbed to a multi-year high.

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

EUR/USD Technical

  • Asian session: Euro/dollar  was  steady, touching a high of 1.3293.  The pair consolidated at 1.3275. In the European session, the pair has edged higher and is putting pressure on the 1.33 line.

Current range: 1.3255 to 1.3300.

Further levels in both directions:     EUR USD Daily Forecast July 29th

  • Below: 1.3255, 1.3175, 1.31, 1.3050, 1.30, 1.2940, 1.2890 and 1.2840, 1.28 and 1.2750.
  • Above:    1.33, 1.3350, 1.34, and 1.3520.
  • On the upside, 1.33 is under pressure. 1.3350 is next.
  • 1.3255  continues to  provide weak support. 1.3175 is stronger.

EUR/USD Fundamentals

  • 13:00 US Pending Home Sales, exp., -1.1%.

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

EUR/USD Sentiment

  • US Consumer Sentiment Climbs: It may not have been  the largest of  gains, but the increase posted by the UoM Consumer Sentiment on Friday was nonetheless significant. The indicator rose from 84.1 to 85.1 points, its highest level since July 2007. Clearly, US consumers feel better about the economy, and this should lead to  improvement in a wide range of sectors, such as retail sales and employment. We’ll have to wait for releases from these and other sectors to see if greater optimism is indeed  leading to stronger economic activity.
  • Euro enjoying the view after strong gains: The euro is up about one cent since Thursday, and is within striking distance of the 1.33 line. The continental currency took advantage of weak employment and manufacturing data out of the US, and  EUR/USD is  now perched at 5-week highs. If the US continues to post mixed numbers, there is room for the euro to take advantage and move higher.
  • US Housing Data points up & down: The US housing sector is a key component of the economy, and strong housing indicators are bullish for the dollar. Last week’s housing releases were inconclusive, as two key housing indicators pointed in opposite directions.  Last week started off an a disappointing note as existing home sales disappointed with a drop to 5.08 million, well below the estimate of 5.27 million. However,  New Home Sales more than made up for this weak release, jumping from 476 thousand to 496 thousand, well above the estimate of 482 thousand. This was  the key housing indicator’s  best performance in five years. So where do we stand? The markets will get another look at housing data on Monday, with the release of Pending Home Sales. The key indicator looked great last month, posting a gain of 6.7%. However, the markets are braced for bad news this time around, with an expectation of a 1.1% decline. We could see some volatility from EUR/USD after this release.
  • Spanish unemployment rate drops:  An unemployment rate of over 26% is not news to celebrate, but it was a ray of good news for Spain, which saw its staggering unemployment rate drop from 27.2% to 26.3%.  This marked the first monthly drop since July 2011, when the unemployment rate was around 21%. We have seen some positive data out of Spain recently, leading Spain’s finance minister de Guindos to declare that Spain’s economy is improving “beyond seasonal effects”. The markets will get another look at Spanish numbers  on Tuesday, with the release of Flash GDP.