By Fast Brokers
The EUR/USD popped from the inflection point of our 1st tier downtrend line and 2nd tier uptrend line on Friday as U.S. equities continued their upward momentum. Indicators all around are pointing towards an economic recovery, the EUR/USD included. The currency pair is following its positive correlation with the S&P futures, representing an investor return to risk.
However, the EUR/USD still has several fundamental obstacles to the upside as compared to the GBP/USD. The relative strength of the Pound is also reflected in the downward pressure present in the EUR/GBP. First, the EUR/USD must brave through the thick of the March trading zone and 2009 highs, not to mention several foreseeable downtrend lines. Investors are still confused as to the future monetary policy plans of the ECB since Claude Trichet ambiguously left the door open for future cuts after the meeting last week. Additionally, if the Eastern European economies weaken further, exposing EU banks to more losses, the ECB may have no choice to implement quantitative easing.
The less than expected 25 basis point cut last week didn’t exactly have its desired impact, and investors are reading into the move as an effort to create a sense of confidence. That being said, the EUR/USD still broke through all of our resistances and the psychological 1.35 barrier. We are simply giving an explanation for the currency pair’s subpar performance as compared to the GBP/USD. The EUR/USD has made some impressive strides, and if it can brave above 2009 highs then we can see a large near-term movement to the upside.
The momentum remains to the upside, yet we could see a little consolidation in the near-term. We placed two new downtrend lines on our chart to give you a better idea of upcoming battle areas. Fundamentally, we find supports of 1.3523, 1.35, 1.3476, 1.3442 and 1.3413. To the topside, we see resistances of 1.3568, 1.3591, 1.3633, 1.3665 and 1.37. The 1.35 area becomes a psychological cushion with 1.40 serving as a key psychological barrier. The EUR/USD is currently exchanging at 1.3526. 
Market Commentary provided by Fast Brokers.
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