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EUR/USD still enjoys Trichet’s explicit rate hike talk and looks to break even higher as the king of forex – Non-Farm Payrolls is awaited. Will it end the week even higher? Or is the pair about to lose some gains? Here’s a quick update on technicals, fundamentals and community trends.

EUR/USD Technicals

  • Asian session:  Sleepy session sees Euro/Dollar just above 1.3950
  • Current range – 1.3950 – 1.4030.

  • Further levels in both directions: Below 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:  1.4030, 1.4160, 1.4230 and 1.4282.
  • 1.3950 is the current pivotal line.
  • While 1.40 is eyed by many, real resistance is only at 1.4030.
  • Major support is only at 1.3440.

Euro/Dollar around 1.3950 after Trichet – click on the graph to enlarge.

EUR/USD Fundamentals –

  • 13:30 US Non-Farm Payrolls. Exp. 200K.
  • 13:30 US Unemployment Rate. Exp. 9.1%.
  • 13:30 US Average Hourly Earnings. Exp.+0.2%.
  • 15:00 US Factory Orders. Exp.+2.1%.
  • 15:00 FOMC member Janet Yellen talks.
  • 15:35 ECB President Jean-Claude Trichet talks.

* All times are GMT.

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

EUR/USD Sentiment

  • All US indicators towards the release of the Non-Farm Payrolls were excellent – the fall in jobless claims, the strong growth in services and manufacturing and ADP report all point to a great jobs report. What does this mean for the dollar? See the  NFP preview for details.
  • Jean-Claude Trichet delivered the goods – not only did he use stronger words such as “strong vigilance” about inflation, but he explicitly said that a rate hike is possible in April. This was the main driver for the Euro higher.
  • Libyan civil war is still going on –  Gaddafi’s exit didn’t happen just yet. Counter attacks by Gaddafi’s forces on an important oil producing city resulted in another jump in oil prices. This risks global growth. An intervention by NATO seems closer. Note that there is unrest also in Oman, Yemen and even in  Saudi Arabia. In Iran, opposition leaders are in jail, and the masses want their release..
  • The Irish people have spoken out – the government that signed the bailout plan has been kicked out and the new government will renegotiate the bailout program. See the analysis of how the Irish elections can weaken the Euro. The EU Summit is held today, but no significant announcements are expected.
  • A  bailout for Portugal is getting closer as bond yields are rising and becoming unsustainable again. They might further rise after the Irish elections. The Portuguese prime minister met with German Chancellor Angela Merkel and they both seemed optimistic.

Currensee Community: 59% are long , 41% are short. These are 1477 open positions in real accounts trading this pair at the moment.