By Fast Brokers – The EUR/USD is getting hammered after moving higher during the Asia trading session. Greek debt continues to set new all-time highs and is leaving beyond the 8% threshold. The yield is rising today after Greece reported a budget deficit of 13.6% of GDP, higher than analyst expectations. Additionally, the budget shortfall in the EU region hit an all-time high of 6.3%. This ignites speculation of contagion and is clearly weighing on the Euro as the currency slides against the Pound. The risk trade as a whole is taking a hit and extending intraday losses after U.S. Unemployment Claims remained above 450k. Nokia and QCOM earnings disappointed, souring the positive earnings so far this week. To top the cake, U.S. PPI printed stronger than anticipated, giving investors just another reason to favor the Dollar over the Euro. The EUR/USD is now approaching key supports as a result, and it will be interesting to see whether the currency pair can withstand a test of previous April lows. Meanwhile, investors are casting aside more positive data from the EU region as Flash PMIs impressed. This adds onto the encouraging consumer confidence data we saw earlier this week. Hence, fiscal fears are dominating and the EUR/USD could continue to get punished until negative psychological forces recede. The data wire will stay active tomorrow as the EU releases Germany’s Ifo business climate index. Additionally, the U.S. will print its DGO and new home sales figures, meaning the trading week could end with a surge in activity.
Technically speaking, the EUR/USD is testing the patience of key uptrend lines now, particularly the 1st tier running through April lows. Therefore, 1.33 could prove to be a key psychological battleground. As for the topside, downtrends are accumulating and the EUR/USD also faces technical barriers in the form of 4/8, 4/9, and intraday highs.
Present Price: 1.3339
Resistances: 1.3348, 1.3359, 1.3366, 1.3375, 1.3381, 1.3390
Supports: 1.3337, 1.3330, 1.3324, 1.3314, 1.3306, 1.3296
Psychological: April highs and lows, 1.34, 1.33
(click chart to enlarge)
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