By Fast Brokers – The EUR/USD has ducked below its psychological 1.34 level as Greek bond yields hit an unacceptable 8%. Hence, financial assistance from the EU seems imminent, fueling further uncertainty that the terms of the aid will be a feasible long-term solution for Greece to recover from its fiscal hole. With the EU quiet on the data wire today, investors have quickly forgotten yesterday’s impressive economic sentiment, current account and PPI data. If uncertainty didn’t continue to plague Greece, the EUR/USD and Euro as a whole would likely be outperforming. However, this is not the case and psychological forces may influence the EUR/USD for some time, or at least until investors are convinced that the financial assistance is sufficient. The U.S. will be quiet on the data wire today as well, meaning U.S. earnings will likely run the show barring any new developments in the Goldman case. Speaking of earnings, Morgan Stanley and Apple topped estimates and this could lead investors to favor the dollar due to the strong performance of corporate America. The data wire will get busy again tomorrow with the EU printing its Flash PMI data set followed by PPI and Existing Home Sales from the U.S. If the Flash PMI data comes in strong like yesterday’s data this may help buoy the EUR/USD and keep the currency pair above its April lows.
Technically speaking, the EUR/USD still has some solid uptrend lines in place despite its latest downturn. However, the currency pair is certainly beginning to test the patience of its support system, which includes intraday, 4/9 and 4/8 lows. As for the topside, the EUR/USD faces barriers in the form of intraday and 4/20 highs along with the psychological 1.34 and 1.35 levels.
Present Price: 1.3399
Resistances: 1.3410, 1.3418, 1.3425, 1.3435, 1.3443, 1.3454
Supports: 1.3393, 1.3385, 1.3375, 1.3369, 1.3357, 1.3346
Psychological: April highs and lows, 1.35, 1.34, 1.33
(click chart to enlarge)
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