By Fast Brokers – The EUR/USD is moderating around our 1st tier uptrend line after taking another step down on Friday. Investors responded to encouraging U.S. consumer-related data buy buying up the Dollar across the board. This was the second Friday in a row that we witnessed a preference for the Dollar in reaction to positive U.S. econ data. Investors should take note of the development for the relationship could persist if U.S. data continues to improve. Although the data wire is relatively quiet today, the EU did release an Industrial Production figure meeting analyst expectations. Even though the FX markets are rather quiet right now, activity could pick up during tomorrow’s session with the release of key econ data from around the globe. From the EU investors will receive ZEW Economic Sentiment data. Analysts are expecting a slight decline in the ZEW numbers while remaining above the expansion threshold (50+). If tomorrow’s ZEW data should disappoint, we could witness further weakness in the EUR/USD as investors find another reason to snap up the Dollar. In addition to tomorrow’s EU data, investors will also receive pricing data from Britain and the U.S. along with TIC Long-Term Purchases, the Empire State Manufacturing Index, Capacity Utilization Rate and U.S. Industrial Production. Hence, another wave of key U.S. data could yield further Dollar volatility.
Technically speaking, the EUR/USD is fighting to stay above our 1st and 2nd tier uptrend lines. These uptrend lines may carry some weight since they run through September and August lows, respectfully. If our 1st tier doesn’t hold, then the EUR/USD has additional technical supports in the form of 11/3 lows and the psychological 1.45 area. However, it seems the EUR/USD is testing the patience of its uptrend since our new 1st tier runs through 8/17 lows, meaning if it doesn’t hold we could eventually witness a more protracted decline towards 1.40. However, before we get ahead of ourselves, we’ll have to wait and see how the EUR/USD interacts with present technical cushions. As for the topside, the EUR/USD still faces multiple downtrend lines along with 12/9 and 12/8 highs.
Present Price: 1.4639
Resistances: 1.4650, 1.4672, 1.4690, 1.4707, 1.4724, 1.4740
Supports: 1.4628, 1.4611, 1.4598, 1.4583, 1.4565, 1.4550, 1.4528
Psychological: 1.45, 1.40, 1.50, November Lows
Market Commentary provided by Fast Brokers.
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