The EUR/USD is logging solid gains so far today as we witness broad-based profit taking the Dollar. Gold is back above $1100/oz and the EUR/GBP has popped towards .90, indicating relative strength in the Euro. The Euro’s strength comes despite yesterday’s weaker than expected French Consumer Spending data. Investors are instead focusing on weaker than expected U.S. New Home Sales, Revised UoM Consumer Sentiment, and Personal Spending. The pullback in U.S. economic data has given investors the opportunity to lock in recent Dollar gains as confidence in the U.S. economy wanes. That being said, investors will receive more key U.S. data today in the form of Durable Goods Orders and weekly Unemployment Claims. If today’s U.S. econ data also print below analyst expectations this could fuel the Dollar present pullback and allow the EUR/USD to hop back above 12/18 highs. Meanwhile, the EU is on holiday for the rest of the week for Christmas, and trading should die down as the U.S. trading session wears on.
Technically speaking, the EUR/USD faces technical barriers in the form of our 3rd and 4th tier downtrend lines along with the psychological 1.45 level. Bulls will be looking to get the EUR/USD back above our 2nd tier uptrend line since it runs through July lows. That being said, the EUR/USD could still be in the midst of a more extensive downturn if the currency pair doesn’t surmount some topside technicals soon. The story will remain the performance of America’s economy and whether fundamentals can continue their impressive recovery over the near-term. As for the downside, the EUR/USD has technical cushions in the form of December and September lows along with the highly psychological 1.40 area should conditions deteriorate.
Present Price: 1.4365
Resistances: 1.4376, 1.4400, 1.4430, 1.4467, 1.4509
Supports: 1.4348, 1.4322, 1.4304, 1.4286, 1.4266, 1.4246, 1.4218
Psychological: 1.45, 1.40, December and September Lows