The EUR/USD is continuing its balancing act along our 2nd tier uptrend line as bulls look to keep the currency pair above November lows. Investor confidence has improved a bit today after Australia's employment data topped analyst expectations. Australia's recovery has given investors renewed confidence in the risk trade, resulting weakness in both the Dollar and Yen. The EUR/USD has benefitted from today's development, and is attempting to build a new base after the selling pressure inflicted so far this month. Meanwhile, the EU remains quiet on the data front, leaving the spotlight on tomorrow's econ data releases from China and the U.S. China will print a set of key data during tomorrow's Asia trading session, including Industrial Production and Trade Balance figures. Continual improvement in China's economic performance could give a much needed boost to the risk trade, buoying the EUR/USD as a result. Afterwards, investors will be honing in on U.S. Retail Sales and UoM Consumer Sentiment data. Since U.S. employment data took a turn for the better last Friday, investors will be watching to see if the uptick in employment resulted in greater consumption. However, it will be interesting to see what impact tomorrow's U.S. econ data has on the Dollar should it print positively. Last Friday the Greenback underwent a large wave of appreciation in reaction to the employment data as investors speculated that the Fed may raise rates sooner than expected. Therefore, investors should monitor the Dollar's reaction to tomorrow's data releases carefully.
Technically speaking, our 1st and 2nd tier uptrend lines may carry some weight since they run through September and August lows, respectfully. Hence, if the EUR/USD doesn't move higher from its developing base the currency pair could be in for another wave of near-term selling pressure. That being said, the EUR/USD still does have our 1st and 2nd tier uptrend lines serving as technical cushions along with November lows. Should conditions deteriorate, the EUR/USD could find solid support in the form of its psychological 1.45 area and October lows. As for the topside, the EUR/USD is building near-term topside barriers as it weakens. The EUR/USD faces multiple downtrend lines along with 12/07 highs and the psychological 1.50 level. Therefore, it seems near-term topside technicals outweigh supports, meaning there remains a downward pressure on the EUR/USD. As a result, investors should monitor the behavior of gold and the S&P futures as investors await Friday's wave of economic data.
Present Price: 1.4724
Resistances: 1.4738, 1.4759, 1.4780, 1.4812, 1.4841
Supports: 1.4724, 1.4701, 1.4682, 1.4669, 1.4650, 1.4640, 1.4628
Psychological: 1.45, 1.50, November Lows
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