By Fast Brokers – The EUR/USD has undergone a hefty selloff today amid a rise in uncertainty in the EU region. Word has spread that Germany is reconsidering the option of Greece going to the IMF for financial assistance. Hence, it seems Germany is trying to call Greece’s bluff since the government recently stated that it will head to the IMF if the EU cannot produce an attractive rescue package. Therefore, despite adamant support from France, Germany is still not on board with helping out Greece. The reappearance of uncertainty has delivered a negative psychological blow to the EUR/USD and is resulting in further relative weakness in the Euro, as highlighted by a pullback in the EUR/GBP. That being said, the EUR/USD has managed to stay above 3/15 lows for the time being and the currency pair is still quite a distance away from our key 1st tier downtrend line. However, we will have to monitor how the remainder of the trading session plays out to determine whether the recent uptrend has been snapped. Investors should keep an eye out for our 1st tier downtrend line since it runs through 2010 highs, or the 1.4575 area. The Dollar is showing a mixed reaction to today’s U.S. economic data thus far. Unemployment Claims and CPI printed about in line with analyst expectations while the Current Account and Philly Fed index each came in solid. Hence, today’s data set does have a positive U.S. bias. The EU released Current Account data of its own, which printed far below analyst expectations, signaling that export demand may have stalled. Germany will release its PPI tomorrow along with a public address from Trichet. However, investors will likely be focusing on any new developments regarding Greece’s fiscal situation.
Technically speaking, the EUR/USD faces multiple downtrend lines along with intraday, 3/3, and 3/12 highs. As for the downside, the EUR/USD has several uptrend lines serving as technical cushions along with 3/15 and 3/10 lows. Meanwhile, the psychological 1.35 area is still serving a technical cushion while 1.40 serves as a key psychological barrier.
Present Price: 1.3665
Resistances: 1.3684, 1.3693, 1.3704, 1.3713, 1.3725, 1.3740
Supports: 1.3667, 1.3653, 1.3637, 1.3620, 1.3603, 1.3586
Psychological: March and February Lows, 1.35, 1.40, February highs
(click chart to enlarge)
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