U.S consumers spent more in February; as reported by the commerce department where spending rose 0.8 percent which is the most in seven months; despite income remained steady at 0.2 percent from the revised down 0.2% in January and below market expectations of 0.4% rise. Meanwhile Core PCE which is the main accounted measure of inflation by U.S. policy makers ticked 0.1% lower from 0.2% in January.

In general the data came close to market expectations thus no big surprises, while the main headline from euro came in the form of boosting its bailout funds ceiling (firewall) by 200 billion Euros, summing to 700 billion .

Markets were looking for such action; however were looking for more, and that supported the euro by the start of today's session, the move came as a needed step on the way towards protecting the area's financial stability.

width=100

The EUR/USD rallied this morning after failing to breach the ascending trend line we mentioned in our report yesterday, to retest near the recent highs and resistance below 1.3385. Stochastic is attempting turn negative, however stability above the aforementioned trend is all what needed for the bullish momentum to remain intact. A push higher above 1.3385 with steady trading will negate any negativity seen on momentum indicators and extend the bullish wave , eying a probable test of 1.3500 major pivot.

width=100

Pound made an impressive run against the greenback, the GBP/USD pair made it above 1.6000 and currently pushing to the upside, however we mentioned previously that we should multi-day of trading above this level to trust the bullish move. What concerns me as well is the potential rising wedge bearish reversal pattern in addition to the negativity seen on stochastic momentum indicator. However going against the flow is not appropriate; thus a push below the ascending trend line of the wedge pattern shall confirm a probable downside reversal. The trend line resides now near the horizontal support area among 1.5930-1.5900. Stability above 1.6000 may extend the move higher towards 1.6100 and 1.6150.

width=100

The downside pressure remains obvious on the USD/JPY pair, where price has tested the major support at 82.00-81.90 one more time, Stochastic is lagging price action thus non confirming the downside bias. Accordingly, a push above 82.50 again could resume the main uptrend towards 83.20 and 84.00. Major support levels below 81.90 start at 81.20 and 80.60.

width=100

The unbiased ranging stance continues to dominate the pair's movement, the USD/CAD pair holds steady around 0.9960 level after the Growth in Canada dropped to 0.1% February from the revised up 0.5% in January, the GDP report which measure the economy's growth rate came in line with expectations. The pair is trading In a clear range-bound since few weeks ceiled from the upside by 1.0050 while 0.9850 forms the ground. We look for another dip towards the bottom of the range near 0.9850 passing by 0.9900 support level, while taking 1.0050 shall open the door for a bullish reversal.