By Fast Brokers – The rally from yesterday is softening and the EUR/USD has been not been able to break through to its psychological 1.25 level. On a positive note, the currency pair is continuing its stabilization pattern, though it remains whether it will hold or just give way like on the 18th. There has been little news out of the EU besides the development that other nations are not joining Germany’s plan to band short selling of government bonds and financials. Hence, the EU seems even more fractured with countries going their own route isn’t of moving forwards in a more unified stance. Attention will likely remain focused on Germany as government officials vote on the $1 trillion rescue package. If by chance the German government doesn’t approve the rescue package then we could see another swift selloff in the Euro, though disapproval is unlikely. The EU was relatively quiet on the data wire today besides German PPI, which printed a tad hotter than analyst expectations. However, the EU will light up the wire tomorrow by releasing its key PMI data set along with Germany’s Ifo business climate figure. Hence, the trading week could end on a volatile note. If the PMI numbers print stronger than expected, this could help buoy the EUR/USD granted there is no new negative psychological development regarding fiscal issues or the rescue package.
Technically speaking, the EUR/USD faces accumulating downtrend lines along with intraday and 5/18 highs. Additionally, the 1.25 area should serve as a solid barrier should it be tested. As for the downside, the EUR/USD has supports in the form of intraday and 5/17 lows along with the psychological 1.21 and 1.20 areas.
Present Price: 1.2330
Resistances: 1.2347, 1.2363, 1.2383, 1.2413, 1.2432, 1.2456
Supports: 1.2326, 1.2307, 1.2286, 1.2268, 1.2245, 1.2233, 1.2213
Psychological: May 2010 lows, April 2006 lows, 1.24, 1.25, 1.23, 1.21, 1.20
Market Commentary provided by Fast Brokers.
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