By Fast Brokers – The EUR/USD is logging large intraday while attempting a test of yesterday’s highs. The EUR/USD has climbed back above its highly psychological 1.35 level and it will be interesting if this momentum holds. The Euro is outperforming in reaction to a pop in Flash CPI coupled with a larger than expected decline in the German Unemployment Change. An improvement in employment and rising prices supports the ECB’s decision to keep its monetary in check. Additionally, good fundamentals from the EU are very welcome considering the psychological toll fiscal troubles in Greece and now Portugal have taken on the Euro. Positive data from the EU contrasts disappointing numbers from the U.S. The ADP and Chicago PMI both missed estimates, striking a blow to confidence surrounding America’s economic recovery. However, the ADP has been known to deviate from the headline, meaning more emphasis will likely be placed on Friday’s employment data. Regardless, the EU outperforming the U.S. has helped the EUR/USD move higher, in effect squeezing some of the countless short sellers. Although the EU will be quiet tomorrow, investors will receive a wealth of data from around the globe. Beginning in Asia, Japan will print the Tankan along with Australia’s Trade Balance and China’s Manufacturing PMI. During the Western session the UK and U.S. will also print their Manufacturing Production figures along with other key data points. Hence, tomorrow could prove to be a very active session in the FX markets throughout the day.
Technically speaking, the EUR/USD is testing the patience of its highly psychological 1.35 level with multiple downtrend lines hanging overhead. The EUR/USD also faces technical barriers in the form of 3/30, 3/23, and 3/19 highs. As for the downside, the EUR/USD has multiple uptrend lines serving as technical cushions along with intraday and 3/25 lows.
Present Price: 1.3519
Resistances: 1.3521, 1.3537, 1.3546, 1.3562, 1.3569, 1.3589
Supports: 1.3509, 1.3494, 1.3481, 1.3469, 1.3459, 1.3446
Psychological: March lows, 1.35, 1.34
(click chart to enlarge)
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