By Fast Brokers – The EUR/USD is registering a solid pop as the risk trade heads higher in reaction to the U.S. data set. Existing Home Sales printed about in line with expectations, leading to slight speculation that the Fed will have to keep its monetary policy loose, a positive for many major Dollar pairs. Belgium’s Business Climate figure also topped expectations, a positive data figure much in need for a reeling currency pair. The EUR/USD is still being weighed down by the battle of words taking place in the EU. Everybody has been taking sides the last couple weeks with Greece stuck in the crossfire. Although a financial assistance resolution for Greece seems is becoming less likely this week, if the EU should bring something to the table this could cause a short-squeeze and benefit the risk trade as a whole. Divergence among EU leaders has taken a psychological toll on the Euro with even the relevance of the EU being thrown into question by some. However, we suggest investors not get too carried away and take a wait and see approach in regards to the EU’s plan for Greece and the rest of the union’s debt-laden nations. In the end it seems every nation is jockeying for position to get what they desire out of any pending resolution, as we witnessed between the U.S. Congress during healthcare negotiations. However, Greece does have some debt issuance coming in a month so a decision will have to be made sooner rather than later. Meanwhile, the UK will release its fiscal budget tomorrow and this could have an impact on the risk trade as a whole. Though nothing drastic is expecting with parliamentary elections on the way, should the UK present a lighter than expected budget this could aid the risk trade and abate concern about the UK’s ballooning deficit. The EU will also release Germany’s Ifo Business Climate figure tomorrow along with the closely watched Flash PMI data set. Positive EU data could help cool some of the flames emitting from Greece, whereas negative data could drag the EUR/USD lower. The U.S. will also print DGO and New Home Sales data, meaning tomorrow could prove to be an active trading session. For the time being the EUR/USD seems to be finding comfort in its psychological 1.35 area.
Technically speaking, the EUR/USD faces multiple downtrend lines along with intraday 2/23, and 3/19 highs. As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/22 and 3/5 lows. Meanwhile, the psychological 1.35 area could continue to serve as a solid technical cushion should it be tested.
Present Price: 1.3535
Resistances: 1.3568, 1.3605, 1.3626, 1.3654, 1.3628
Supports: 1.3534, 1.3504, 1.3484, 1.3467, 1.3476, 1.3440
Psychological: March and February Lows, 1.35
(click chart to enlarge)
Market Commentary provided by Fast Brokers.
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