By Fast Brokers – The EUR/USD’s run topped out and the currency pair has dropped quickly, sinking below 2/22 lows in the wake of weaker than expected EU data. Germany’s Ifo Business Climate number came in a point below analyst expectations. However, the more disconcerting release today is the huge decline in French Consumer Spending. The figure printed -2.1% lower than analyst expectations and is the weakest reading since October 2006. Negative fundamentals are certainly not what the EUR/USD needs considering the extent of last week’s downturn. 
Investors responded abruptly by selling off the EUR/USD and sending the EUR/GBP on a large leg down. However, the EUR/USD is still trading well above its psychological 1.35 level and previous February lows. Hence, the currency pair has an opportunity to consolidate and salvage some form of a near-term uptrend. Once again, the EUR/USD’s resilience will likely depend upon upcoming EU and U.S. data as well as developments in Greece and the other PIIGS economies. It will be interesting to see how the risk trade reacts to U.S. data. Should U.S. fundamentals print stronger than expected, this could place downward pressure on the EUR/USD so long as EU data comes in weak. On the other hand, upbeat U.S. data could give investors confidence in the global economy and favor the risk trade. That being said, the FX markets are still very dynamic and a bit unpredictable. Hence, investors should continue to monitor activity in the EUR/USD closely.
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 2/22 and 2/23 highs serving as technical barriers should they be reached. As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 2/19 and 2/18 lows. Furthermore, the psychological 1.35 area could come back into play should it be tested.
Present Price: 1.3549
Resistances: 1.3572, 1.3592, 1.3612, 1.3632, 1.3652, 1.3679
Supports: 1.3542, 1.3526, 1.3511, 1.3493, 1.3473, 1.3453
Psychological: February lows, 1.35
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