EUR/USD: news from the battlefield
EUR/USD currency pair opened the week at $1.3010 and has strengthened to $1.3055 as of writing. Euro has partially retraced Friday’s 100-pips drop from the $1.3100 resistance (100-week SMA).
Euro remains supported following a release of Spanish and Italian manufacturing PMI figures that came above the forecast. Euro zone’s unemployment rate increased to 12.1%, but less than expected.
Friday’s shooting star candle is a bearish signal, but the $1.3000 level remains a strong support for now. We would expect the $1.3065/3100 area (daily SMAs, 50% Fibo) to cap the upside. Given the mixed technical and fundamental signals, we recommend standing aside and waiting to for the clearer signals to enter the trade. Beware of the false breaks as this week the trade may be choppy.
The medium term picture still remains bearish: clear break through the $1.3000 barrier would open the way to our target at $1.2850.
Chart. Daily EUR/USD