EUR/USD: news from the battlefield
EUR/USD rose by more than 300 pips over the past week and broke above the $1.3200 hurdle. On Thursday the bulls tested the $1.3300 mark on ECB Draghi’s comments, but pulled lower on Friday on upbeat US employment data. As a result, the pair closed the week just above $1.3200 and opened with a gap down on Monday.
Today the pair is trading in the positive territory, but we see that the $1.3250 resistance (50% Fibo from the 2013 downside) remains in place. Below this level the pair remains under the bearish pressure. Slide below the daily low of $1.3180 would open the way to at least $1.3110/00 (38.2% Fibo from the May growth). Next support is seen at $1.3050, $1.3000 and $1.2950. From the fundamental viewpoint, increased US QE tapering expectations also speak in favor of a downside. A clear break above the weekly high of $1.3300 is needed to open the upside. Next resistance will be seen at $1.3350, $1.3400 and $1.3475.
As for the economic calendar, today there are no important releases on the EU agenda. Watch the FOMC member Bullard Speech in the US session for more hints on monetary policy prospects. On Tuesday and Wednesday the German constitutional court will scrutinize the legality of the ECB’s OMT program, which had a very positive calming effect on the markets when launched in 2012.
Chart. H4 EUR/USD