By Fast Brokers – The EUR/USD is stabilizing after Friday’s solid pop in the wake of mixed EU PMI data. Positive manufacturing from Germany gave investors a reason to hope that the EU can withstand the economic storm in the Mediterranean. However, uncertainty remains as Greece works to prove that it can successfully implement its austerity plan while Spain, Portugal, and Italy battle with their own fiscal deficits. Therefore, the EUR/USD does remain in a fragile state despite Friday’s positive movement. Hence, investors should keep an eye on upcoming data, including tomorrow’s German Ifo Business Climate release. Furthermore, there is potential for another unexpected development in the PIIGS countries. That being said, investors should remain alter for we’ve seen how volatile FX markets can get amid debt concerns. Meanwhile, the data wire is relatively quiet today, giving the risk trade an opportunity to cool and stabilize. It will be interesting to see whether the EUR/USD can piece together a more convincing recovery from Friday’s lows.
Technically speaking, the EUR/USD faces multiple downtrend lines considering the extent of this year’s downturn in the currency pair. The EUR/USD also has 2/17 and 2/19 highs serving as technical barriers should they be reached. As for the downside, the EUR/USD now has several uptrend lines serving as technical cushions along with 2/12 and 2/18 lows. Furthermore, the EUR/USD is back above its highly psychological 1.35 level, meaning the area could serve as a cushion as well.
Present Price: 1.3623
Resistances: 1.3630, 1.3645, 1.3670, 1.3695, 1.3713, 1.3741
Supports: 1.3612, 1.3587, 1.3564, 1.3546, 1.3532, 1.3511
Psychological: February lows, 1.35
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