EUR/USD Mar. 14 – Fills the Gap and Capped by Resistance

EUR/USD opened higher but quickly returned under resistance as the markets digest the EU Summit and the catastrophic earthquake in Japan. Will the pair break out from the range? Here’s a quick update on technicals, fundamentals and community trends.

EUR/USD Technicals

• Asian session:  Sunday gap leap at 1.3980 was followed by a fall down to close the gap.
• Current range – 1.3860 – 1.3950.

• Further levels in both directions: Below 1.3860, 1.3760, 1.37, 1.3610, 1.35, 1.3440, 1.3334, 1.3267, 1.3180, 1.3080, 1.2970.
• Above:  1.3950, , 1.4030, 1.4160, 1.4282, 1.44
• While the round number of 1.40 is eyed by many, real resistance is only at 1.4030. This was clearly seen last week.
• Support at 1.3860 was breached on the Spanish downgrade, but was regained later. Range extended to the 1.3760 line.

Euro/Dollar in same range under resistance – click on the graph to enlarge.

EUR/USD Fundamentals –

• 10:00 European Industrial Production. Exp. +0.4%.
• 12:00 ECB member Axel Weber talks.

* All times are GMT.

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

EUR/USD Sentiment

• Japanese Earthquake rocks markets: The catastrophic earthquake and tsunami in Japan kills at least 10,000 people, and more deaths are feared as some nuclear reactors are still unstable. The BOJ injected a whopping $86 billion to aid the economy. After a rough start USD/JPY stabilizes at higher ground. The choppy trading concerning the yen has a strong impact
• Bailout for Portugal – The EU Summit made important decisions about allowing bond buying from the bailout fund and increasing its size. But, the fund cannot buy bonds of countries that didn’t receive a bailout yet. This means that Portugal’s bailout is getting very close. See here the full analysis of the EU Summit.
• Moody’s downgrades Spain’s credit rating by one level to AA2 but at the moment, Spanish bond yields are falling, showing hope that the crisis will pass over the Euro-zone’s fourth largest economy.
• Price of oil under $100:, As the forces of Gaddafi manage to reconquer some land from the rebels, and the battles at  Ras Lanuf halt oil refining, worries about global growth and the relative calm in Saudi Arabia calm the markets. Here’s more about oil and gas.

Currensee Community: 60% are long , 40% are short. These are 1369 open positions in real accounts trading this pair at the moment.