The EUR/USD is trading a bit off of intraday highs after nearly hitting October highs, and the currency pair is presently trying to hold strong above its psychological 1.50 level. Meanwhile, our important 3rd tier downtrend line continues to play a key technical role since it runs through these important October highs. Therefore, although the EUR/USD may be on the cusp of a near-term breakout, the two key downside technicals (3rd tier and Oct. highs) are still in play. That being said, the EUR/USD has several uptrend lines serving as technical supports along with 11/10 and 11/09 lows. Hence, there is a strong near-term support system in place should the EUR/USD opt to delay its retest of October highs.
On a positive note, gold is continuing its upward movements while creating separation from the psychological $1100/oz level in the process. Gold's incessant breakout could be a signal that the EUR/USD is due for a similar movement since the two investment vehicles are normally positive correlated. U.S. equities are another bright spot as the S&P futures knock on their own 1100 ceiling. A topside breakout in the S&P futures could be another buy signal for the EUR/USD since equities are negatively correlated with the Dollar as well.
Although the EU didn't release any econ data today, the Euro is benefitting from a combination of positive China econ data and dovish monetary statements from several Federal Reserve members. China's Industrial Production, Retail Sales, and Trade Balance releases all printed hotter than expected, a positive catalyst for equities since China has been the growth engine for the global economic recovery. China's optimistic consumption and production data is encouraging investors to wade back into riskier investment classes, such as the EUR/USD. Meanwhile, statements from multiple Fed officials reaffirmed that central bank's monetary policy will likely remain loose for the foreseeable futures due to America's sluggish economic recovery. Investors are selling the Dollar in reaction and picking up currencies with more conservative monetary policies instead.
The EU will release some industrial production data tomorrow, and analysts are expecting a decline of 3 basis points to 0.6% growth. However, investors will likely pay more attention to Friday's Prelim GDP from Germany. If both data points should print better than expected while U.S. equities move above 1100, this could help boost the EUR/USD beyond 1.50 and October highs.
Present Price: 1.5018
Resistances: 1.5019, 1.5037, 1.5049, 1.5061, 1.5085, 1.5127, 1.5146
Supports: 1.4999, 1.4981, 1.4966, 1.4947, 1.4923, 1.4905
Psychological: 1.50, October Highs