EUR/USD Weakens Following ECB Decision

The EUR/USD is trading off of intraday highs after the ECB kept its benchmark intact and tightened some alternative liquidity measures as expected.  Trichet also added that the ECB feels an IMF intervention to help Greece would be unwise.  Speaking of Greece, citizens are protesting again, this time occupying a governmental financial building.  Today’s protests come a day after Greece announced further austerity measures to pacify other EU members.  Markets greeted Greece’s new austerity measures positively by sending the EUR/USD a leg higher.  However, uncertainties remain in Greece, particularly how citizens well handle the deep budget cuts coming into effect.  Additionally, there remains the possibility of similar debt issues popping up in Italy, Spain, and Portugal.  Regardless, yesterday’s rally in the EUR/USD was encouraging, and the currency pair continues to consolidate above its highly psychological 1.35 area.  Meanwhile, investors are awaiting U.S. Pending Home Sales and Factory Orders data.  U.S. weekly Unemployment Claims printed a bit stronger than anticipated and productivity remains at a heightened level.  The EU was quiet on the data wire today, leaving the ECB in the spotlight.  Although the EU will release German Factory Orders data tomorrow, investors will likely focus on the U.S. with the release of Non-Farm Employment Change data along with the headline Unemployment Rate.  The ADP number printed near expectations yesterday, though the advanced number has a reputation of being somewhat unreliable.  That being said, the FX markets could end the trading week on a volatile note.

Technically speaking, the EUR/USD faces multiple downtrend lines along with 3/3and 2/17 highs.  As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/3, 2/26, and 3/1 lows.  Meanwhile, the psychological 1.35 area could continue to have an impact on price movements.

Present Price: 1.3632

Resistances: 1.3641, 1.3654, 1.3676, 1.3694, 1.3709, 1.3724, 1.3737

Supports:  1.3619, 1.3606, 1.3589, 1.3574, 1.3557, 1.3542

Psychological: March Lows, 1.35

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