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EUR/USD remains at a safe distance above high support as hopes that a Greek deal will be published as soon as tomorrow boost the common currency. Also US weakness aids the pair. We have important US data towards today. Here’s a quick update on technicals, fundamentals and what’s going on in the markets.

EUR/USD Technicals

  • Asian session: An active session saw the pair move further away from the 1.4375 support line, and bounce off resistance at 1.4450.
  • Current range 1.4375 to 1.4450.

Euro to Dollar chart June 1 2011

  • Further levels in both directions: Below 1.4375, 1.4282 1.4160, 1.4030, 1.3950, 1.3860, 1.3760, 1.3570, 1.3440.
  • Above:  1.4375, 1.4450, 1.4580, 1.4650, 1.47, 1.4775.
  • 1.4450 is a veteran line of resistance that now returns to have a major role.
  • 1.4375 was a line of struggle earlier, but its role is now confirmed.

Euro/Dollar remaining strong  – click on the graph to enlarge.

EUR/USD Fundamentals

  • 8:00 European  Final Manufacturing PMI. Exp. 54.8. Actual 54.6.
  • 11:30 US  Challenger Job Cuts.
  • 12:15 US  ADP Non-Farm Payrolls. Exp. 177K.
  • 13:00 ECB president Jean-Claude Trichet talks.
  • 14:00 US  ISM Manufacturing PMI. Exp. 58.1 points.
  • 14:00 US  Construction Spending. Exp. +0.4%.
  • 14:00 US Treasury secretary Tim Geithner talks.

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

EUR/USD Sentiment

  • New Bailout Plan tomorrow?: There are talks that the European Union, the IMF and Greece will complete the talks for a second bailout program on Thursday, tomorrow. This boosts the Euro.
  • Weak US: Chicago PMI, Consumer Confidence and house prices all disappointed yesterday. This join  weak growth in Q1, only 1.8%, according to the second release as well. Also jobless claims refuse to fall.
  • First German bank acknowledges Greek haircut: The German Landesbank NordLB wrote down assets related to Greek bonds. Although the sum is small, this is a precedent.
  • Weak European figures: Inflation came out weaker than expected. So did German retail sales and German unemployment and other European numbers. This doesn’t hurt the euro, not yet. But if the German weakness and the softer inflation push the rate hike further back, the euro will sure suffer.
  • Rehn warns that Greece won’t get paid: The EU Commissioner joins other senior speakers such as Juncker and the Dutch finance minister in threatening that Greece won’t get the next tranche, due on June 29th – the deadline is getting close.
  • Spanish protests and yields calm: Protests are still active in the main squares of Spanish cities, but there is no new development after the regional elections. These elections were a blow to the ruling socialists. The new authorities might reveal a huge pile of hidden debt. Spanish yields on 10 year remain stable at 5.35% – significantly lower than the peaks last week, but now on the rise.

FXCM Speculative Sentiment Index shows larger gains for the euro: 59% are short, more than 58%. According to this contrarian index, this shows continued gains for EUR/USD.

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