EUR/USD Climbs in Speculation EU to Take Action

By Fast Brokers – The risk trade ran with speculation that the EU plans to take action in regards to Greece’s troublesome fiscal situation.  Trichet cut a trip to Australia short to return for an EU meeting this week, igniting speculation that the EU will be proactive in sorting out Greece’s troubles.  However, such a deduction seems highly speculative and investors may not want to read too far into Trichet’s actions at this point in time.  That being said, it appears the risk trade was looking for any excuse to bounce considering the extent of last week’s decline.  Hence, the EUR/USD is still lodged in its downtrend and may need more concrete fundamental and/or psychological evidence to turn a corner.  The data wire will begin to pick up during tomorrow’s Asia trading session with Australia releasing Home Loans data followed by New Loans and Trade Balance data from China.  Additionally, the EU will release French Industrial Production and the U.S. will print its own Trade Balance numbers.  Furthermore, the UK will publish its highly anticipated BoE Inflation Report accompanied by a public address from Mervyn King.  Therefore, the FX markets have more than enough news and data to digest tomorrow and determine whether to take the present risk rally a step higher.

Technically speaking, the EUR/USD faces topside technical barriers in the form of multiple downtrend lines along with intraday and 2/4 highs.  As for the downside, we’ve created a few new uptrend lines to serve as technical cushions along the psychological 1.35 level and previous February lows.

Present Price: 1.3732

Resistances: 1.3744, 1.3773, 1.3806, 1.3831, 1.3861, 1.3895

Supports:  1.3721, 1.3693, 1.3664, 1.3640, 1.3610, 1.3658

Psychological: February highs and lows, 1.35

(click chart to enlarge)

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