EUR/USD is steady, following remarks by ECB chief Mario Draghi to a European Parliament committee. The pair continues to trade in the mid-133 range. In economic news, there was good news, as German ZEW Economic Sentiment and Eurozone ZEW Economic Sentiment rose sharply. The US markets are back in action, but there is only one release today – the NAHB Housing Market Index.
EUR/USD Technical
- Asian session: Euro/dollar was quiet, touching a low of 1.3336 and consolidating at 1.3343. The pair is unchanged in the European session.
- Current range: 1.3290 to 1.3360.
Further levels in both directions: 
- Below: 1.3290, 1.3255, 1.3170, 1.3130, 1.3110, 1.3030, 1.30 and 1.2960.
- Above: 1.3360, 1.34, 1.3486, 1.3588, 1.3690, 1.3740, 1.3860, 1.3915 and 1.40.
- The pair is testing resistance at 1.3360. The next line of resistance is at the round number of 1.34.
- On the downside, 1.3290 is the next support level.
Euro/dollar steady after Drahgi testifies before European Parliament Committee – click on the graph to enlarge.
EUR/USD Fundamentals
- 10:00 German ZEW Economic Sentiment. Exp. 35.3 points. Actual 48.2 points.
- 10:00 Eurozone ZEW Economic Sentiment. Exp. 35.5 points. Actual 48.4 points.
- 15:00 US NAHB Housing Market Index. Exp. 48 points.
For more events and lines, see the Euro to dollar forecast
EUR/USD Sentiment
- Draghi Speaks at ECB: On Monday, ECB chief Mario Derghi testified before the European Parliament Committee on Economic and Monetary Affairs. Draghi said that the Eurozone is stable, but acknowledged that the economy was weak after three straight quarters of negative growth. He reiterated that he expects the Eurozone to show improvement later in 2013. Draghi also touched on the hot topic of currency exchange rates. He repeated his concern that the high value of the euro could impact on the ECB’s inflation outlook, but sought to reassure his listeners that the euro’s exchange rate was not a policy target.
- GDP releases spook markets: The euro has enjoyed a strong 2013, but the currency hit some turbulence last week, as Eurozone GDP releases for Q4 of 2012 pointed to negative growth. Germany, France and Italy all recorded contraction in their economies, as did the Eurozone economy. ECB head Mario Draghi has declared that the bloc’s economy will rebound later in the year, but is this little more than wishful thinking? The ECB has forecast that the Eurozone economy will shrink by 0.3% in 2013, so Draghi’s optimism could be premature. The euro, which enjoyed a tremendous run in January, has reversed course, losing about 300 points in February. If the markets continue to see weak Eurozone numbers, the euro could take it on the chin from the US dollar.
- US Data shines: In the US, UoM Consumer Sentiment and the Empire State Manufacturing Index looked sharp. Consumer Sentiment rose to 76.3 points, exceeding the estimate of 74.8 points. The Manufacturing Index jumped 10 points, well above the forecast of -2.1 points. The markets were pleased with the data, as both indicators have been struggling recently. These releases come on the heels of US Unemployment Claims, which were very strong. The US will release a host of key data later in the week, and the markets will be hoping for more positive tidings.
- G-20 discusses exchange rates: The G-20 concluded a two-day meeting in Moscow on the weekend. The talks were attended by finance ministers and central bank governors, and the final statement included a mild comment on the recent volatility in exchange rates. The leaders pledged not to “target our exchange rates for competitive purposes”, and to move more rapidly to market-determined exchange rate systems. The G-20 statement did not make reference to Japan, which has come under fire for monetary policies which have led to free-fall in the value of the Japanese yen. The G-20 also stated that more effort was needed to continue to strengthen the Eurozone, by building a stronger economic and monetary union.
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