By TraderVox.com
The pair has started the week with a plunge to 1.2906 on Monday. While the downward trend is not expected to last for long, the intraday trading forecast for the euro-dollar pair remains neutral to bearish. However, the pair is expected to remain above the support level of 1.2816, which is the 38.2 percent retracement of 1.2255 to 1.3171 at 1.2821. An upward breakout from this level is anticipated, where a break above the resistance level of 1.3171 would pave way for 1.3486 resistance level.
The resistance levels to look at today include the resistance level at 1.2936, which has been weak last week. If the pair breaks above this level, the resistance at 1.2951 this paves way for 1.2967. Some of the important support levels in the coming days include support at 1.2905, 1.2889 and 1.2874. The pair is expected to trade at an average of 1.2920 this week. In the medium term, if the pair increases above the 1.3486, this should be an indication of an upward trend which would be limited by the resistance at 1.5. The medium term sentiments for the euro-dollar cross remains bullish as the support level of 1.25 is staying firm.
Some of the EUR/USD sentiments that are in play this week includes the tensions that are rising in Spain over Catalonia and the discussion ranging over the bailout conditions; this is generally negative for the euro. There are also sentiments that Greece is getting closer to a deal with its international creditors. However, the country is seen as failing to meets bailout targets set during its aid discussions. The discussions of a European recession are also spurring fear in the market and investors might avoid the 17-nation currency.
Further, the increasing geopolitical tensions between China and Japan have spurred tension in the global economy. The rising protests in China against Japanese targets have led to closure of some Japanese factories and businesses. The market expects some tension in the UN Assembly as US tries to quell the situation while supporting Japan.
All these global issues coupled with the waning effects of the QE3 and the mixed US data last week and the expected reports this week will affect the movement of the cross.
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