Resistance: 1,3440/ 1,3475-80/ 1,3530-40/ 1,3610-30/ 1,3670/ 1,3710/ 1,3750/ 1,3800
Support : 1,3380/ 1,3350/ 1,3310/ 1,3280/ 1,3250/ 1,3215-20/ 1,3170/ 1,3130
Comment: Euro closed with losses last week, which were widened after Friday's releases from the US, regarding the unemployment rate and Non Farm payrolls. Dollar rose despite the increase of 500.000 in job losses and unemployment rate at 7,2% and the break of 1,3600 and 1,3550 support, led to our net targets at 1,3400-20.
As we had mentioned in our analysis on Friday, the market was already expecting that number and only a much higher outcome would be able to bring new pressure to the dollar…
This week is full of important economic releases, such as retail sales, CPI and TIC Long-Term Purchases and most important on Thursday, the ECB interest rate decision.
'The market expects a 0.50% cut in European interest rates after the inflation's decrease below 2,00% and this may help the uptrend, but it all depend on the comments from Trichet and other officials regarding the interest rate decision.
Technically, EUR/USD is in an overbought condition in the 4 hour and the hourly chart and an upward reaction seems as a possible scenario. First important resistance is found at 1,3470-80, followed by the more important base of 1,3530-50. A break of the second could lead to our next target at 1,3630-40, or maybe a retracement to 1, 3800, in terms of a consolidation.
If the short term downtrend remains valid and first resistance at 1,3470-80 is confirmed, may bring euro to previous lows at 1,3300-20. A downward break of 1,330, would have as next possible target the area of 1,3100, canceling our expectations for a retracement above 1.4000 or higher… The daily close would give more indications regarding a possible strategy…
An upward reaction to 1,3470-80 or 1,3530-50 area is a possible scenario, and we could try buy orders at the retracements with the intention to add more at 1,3310-30, with stops below 1,3275.
Otherwise, we could try sell orders after a break of 1,3300, with target at 1,3220-30 or 1,3100, or after a reach of 1,3530-50 resistance.