By Fast Brokers – The EUR/USD is consolidating above Friday lows as markets take a breather after last week’s large pullback in the Euro. We notice the EUR/GBP and gold are hunkering within their trading ranges as well, implying investors are waiting for further fundamental data before making a more definitive directional decision. The EU will release its ZEW Economic Sentiment data tomorrow along with UK CPI and an Inflation Letter from the BoE. Furthermore, we’ve got a slew of important data from the U.S and China on Wednesday. Hence, activity could really pick up as the week progresses and we could witness a break in the EUR/USD from the comfort of its trading range. That being said, although the EUR/USD has had a downward inclination lately, the currency pair has managed to bottom above 1/8 lows and our 2nd tier uptrend line. Therefore, the EUR/USD has the potential to pop back into its uptrend should upcoming fundamentals support the risk trade. On the other hand, the EUR/USD is presently hovering close to some key technical supports. Therefore, the currency pair could take another sizable step down should technicals deteriorate further.
Technically speaking, the EUR/USD has bottomed nicely above 1/8 lows and our 2nd tier uptrend line. Hence, although the uptrend is presently in a weak state it’s still in play. That being said, the EUR/USD has our 1st and 2nd tier uptrend lines serving as technical cushions along with December ’09 lows should they be tested. Our 1st tier uptrend line runs through January lows. Hence, a failure of our 1st tier could yield a more protracted leg down. As for the topside, the EUR/USD faces multiple downtrend lines along with 1/7, 1/5, and 1/14 highs. Furthermore, the psychological 1.45 level could serve as a technical obstacle should it be tested.
Present Price: 1.4372
Resistances: 1.4400, 1.4427, 1.4460, 1.4474, 1.4499, 1.4520
Supports: 1.4351, 1.4328, 1.4310, 1.4295, 1.4270, 1.4233
Psychological: 1.45, December highs and January lows
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