EUR/USD: news from the battlefield
EUR/USD is trading in a narrow $1.3080/50 range on Tuesday, down from the yesterday’s highs of $1.3110 (top of the daily bearish Ichimoku). Wave of USD selling was provoked by disappointing US ISM manufacturing on Monday (49.0 vs. previous 50.7). Today’s data showed Spanish unemployment contracted more than expected. Later in the day watch the US trade balance (forecast – negative).
Danske Bank expects a higher retracement un EUR/USD: “In a short term we would be cautious as USD gave back less than expected given the size of the drop in the ISM. The greenback still remains overbought”.
The next resistance is seen at $1.3100/10 and $1.3195/3200. We concede that the pair could extend gains in the near term, but the $1.3250 resistance is expected to hold (50% Fibo). To the downside watch the $1.3000, $1.2980 and $1.2950 levels.
Chart. Daily EUR/USD