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EUR/USD is trading in a perfect high range, as tension mounts towards the Non-Farm Payrolls release. It reached these levels after there details emerged on a new “adjustment” plan for Greece. There is no confirmation of this just yet. How will it close the week?Here’s a quick update on technicals, fundamentals and what’s going on in the markets.

EUR/USD Technicals

  • Asian session: Very quiet session saw the pair consolidating between 1.4450 to 1.4520, where it still is.
  • Current range 1.4450 to 1.4520.

Euro to Dollar Chart June 3 2011

  • Further levels in both directions: Below 1.4450, 1.4375, 1.4282 1.4160, 1.4030, 1.3950, 1.3860, 1.3760, 1.3570, 1.3440.
  • Above:  1.4520, 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 is weaker now.

Euro/Dollar rising in range  – click on the graph to enlarge.

EUR/USD Fundamentals

  • 12:30 US Non-Farm Payrolls. Exp. 150K. See preview here.
  • 12:30 US Unemployment rate. Exp. 9%.
  • 14:00 US  ISM Non-Manufacturing PMI. Exp. 53.8 points.

For more events later in the week, see the Euro to dollar forecast

EUR/USD Sentiment

  • Greek talks sealed: There were talks that a new 3 year adjustment plan was reached. This was denied later, but the euro already settled higher. Will this prevent a Greek default?
  • Weak US economy begins weighing on EUR/USD:  ADP NFP was a disaster, showing that only 38K jobs were gained.  Manufacturing PMI was also bad. These numbers join other bad figures such as Chicago PMI and consumer confidence released earlier this week. But this slowdown impacts the whole world, and sends us back to the risk averse trading: bad US figures mean a stronger dollar against the euro. Normal behavior is still seen against the yen and the franc.
  • Greece Junked: Rating agency Moody’s downgraded Greece once again. The difference this time was not only the three notches downgrade, but also the putting the debt in C status – meaning junk.
  • 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.

FXCM Speculative Sentiment Index shows larger gains for the euro: 60% are short, less  than 63% yesterday. According to this contrarian index, this shows weaker  gains for EUR/USD.