EUR/USD is gradually moving higher towards the one-year high as European officials clarify that we’ll see a rate hike in April. Will it make the big breakout or turn around at this point? Here’s a quick update on technicals, fundamentals and community trends.
EUR/USD Technicals
- Asian session: Calm session sees EUR/USD stick above 1.4220.
- Current range – 1.4160 – 1.4282
- Further levels in both directions: Below 1.4160, 1.4030, 1.3950, 1.3860, 1.3760, 1.37, 1.3610, 1.35, 1.3440, 1.3334, 1.3267, 1.3180, 1.3080, 1.2970.
- Above: 1.4282, 1.4450, 1.4580, 1.48.
- 1.4282 is getting very close now – it is the highest level in a year and is eyed by many. A test of this level may be tough.
- 1.4030 now turned into important support after being broken – this is the key level to lower ones.
Euro/Dollar moving higher – click on the graph to enlarge.
EUR/USD Fundamentals –
- 11:35 FOMC member Richard Fisher talks
- 12:30 US Treasury Secretary Timothy Geithner talks
- 14:00 US Richmond Manufacturing Index. Exp. 23 points.
* All times are GMT.
For more events later in the week, see the EUR/USD forecast
EUR/USD Sentiment
- European officials state rate hike is underway: Senior ECB officials continue to beat the rate hike drum. This includes president Jean-Claude Trichet that reiterated his speech from Friday in which he hinted that no change is expected with the rates. This sent the Euro higher.
- Bailout for Portugal – Some government institutions in Portugal find it hard to finance themselves. Portugal is very close to asking for a bailout but the Euro ignores it. In addition, the main Portuguese opposition party refuses to back the budget – a budget which is necessary for calming investors. The second EU Summit at the of the week is critical for the Euro. Together with the credit downgrade by Moody’s and the weak decision in the first EU Summit, this makes the bailout closer. Here’s a full analysis of the EU Summit.
- International Currency Intervention: The G7 countries intervened to push the yen lower and aid Japan’s economy in the face of the earthquake. The ECB, together with French and German central banks, bought a lot of EUR/JPY – more than American buys of USD/JPY – pushing EUR/USD higher. No fresh action has been seen since Friday, but it could be resumed if the yen strengthens.
- Libyan Airstrikes Weakening: Air strikes in Libya began over the weekend but have waned off. The price of oil is higher, but more stable. This weighs on the US dollar. See a full analysis of the UN decision on Libya and the implications for oil and the dollar.
Currensee Community: 58% are long , 42% are short. These are 1462 open positions in real accounts trading this pair at the moment.
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