By Fast Brokers – Greece experienced another wave of protests today as the government looks to implement its aggressive austerity package. However, the Euro has shown little reaction to the protests since Greece is still expected to go ahead with the austerity measures despite public disapproval. Meanwhile, the EUR/USD is hold strong within its tight trading range as it stands strong above 1.35 and previous March lows. The EUR/USD has shown quite a bit of resilience over the past month considering the extent of the currency pair’s downturn during January and the beginning of February. It will be interesting to see if the EUR/USD can manage a stop side breakout from this new base over the near-term, or whether another wave of selling disables the currency pair. Overall, the longer the EUR/USD can consolidate with a slight upward trajectory, the better off the currency pair could be in the medium-term. However, we will have to wait and see how events unfold. Meanwhile, our downtrend lines are drawing nearer, meaning the EUR/USD has the potential for some accelerated topside movements should fundamentals and/or psychological cooperate. We also take note that the EUR/USD is getting closer to our 5th tier downtrend line, which runs through the 1.4550 area. Hence, this gives you an idea of the kind of topside potential the currency pair has. The EU will continue to be quiet on the data wire for the remainder of the week, meaning tomorrow’s U.S. Retail Sales and UoM releases will likely garner the spotlight.
Technically speaking, the EUR/USD faces multiple downtrend lines along with 3/8 and 3/3 highs. Our 4th tier downtrend line could serve as a key resistance since it runs through 2/9 highs, or the 1.38 area. As we explained before, our 5th tier could also serve as a key barrier in regards to the medium-term outlook for the EUR/USD since it runs through the 1.4550 area. As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/5 and 3/2 lows. Meanwhile, the psychological 1.35 area could continue to have an impact on price movements.
Present Price: 1.3630
Resistances: 1.3637, 1.3654, 1.3672, 1.3691, 1.3713, 1.3733
Supports: 1.3618, 1.3602, 1.3579, 1.3559, 1.3542, 1.3528
Psychological: March and February Lows, 1.35
(click chart to enlarge)
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