EUR/USD: not a day to sell
EUR/USD is consolidating in the $1.3395/55 area. Despite weaker-than-expected US data, many traders think that the Fed will begin reducing monetary stimulus in September. The bulls feel uneasy due to the concerns about emerging markets and tensions in Syria.
Resistance is at $1.3400, $1.3427 (Aug.21 high) and $1.3452 (Aug. 20 high). Support is at $1.3347 (61.8% Fibo), $1.3328 and $1.3300.
The market players are waiting for the release of German Ifo business climate index at 08:00 GMT (forecast: 107.1; previous: 106.2).
Westpac: “A decent German IFO survey would add to the case for a EUR/USD test of $1.3500 though progress is slowed by broad USD resilience. Greece lingers on the horizon but for the most part sovereign debt is not a near term market concern. Our multi-week bias remains to sell this rally but not this week.”
Credit Agricole: Today is also not a day to sell EUR as surprise in a positive direction may come from the euro zone’s data releases. It’s not all bullish for EUR, however.Technical indicators suggest that upside EUR/USD momentum is fading while Greek jitters could return as the Troika returns on September 16. Moreover, speculative market EUR positioning has risen to its highest since early February, leaving no more scope for short covering.
Chart. H4 EUR/USD