The EUR/USD managed to bottom out at our 3rd tier uptrend line yesterday despite a pop in sell-side activity in reaction to more negative U.S. economic data. The EUR/USD continues to trade primarily off of its last important data releases, Friday's disappointing GDP data points. However, the EUR/USD is strengthening again today in the face of a surprisingly negative EU Current Account release, indicating an increase in import demand. Additionally, the U.S. released a set of negative housing numbers combined with slightly positive CPI data. Regardless of the continuation of negatively mixed data, the Dollar continues to indicate a preference for its downtrend. We should note that both the EUR/USD and AUD/USD have been strongly correlated with gold this year, yet haven't participated in the precious metal's most recent rally past $1100/oz. Therefore, the EUR/USD may be gaining correlative support from gold, countering the impact from more disappointing EU economic data. Lastly, the wave of negative U.S. econ data further supports the anticipation that the Fed will maintain a loose monetary policy for the foreseeable future, thereby weighing on the value of the Dollar. The EU data wire will be relatively quiet until Friday's German PPI release, meaning the currency pairs immediate-term performance may rest on the performance of U.S. equities and their reaction to tomorrow's weekly Unemployment Claims release.

Technically speaking, the EUR/USD still faces multiple downtrend lines along with the highly psychological 1.50 level and previous November highs. However, and a breach beyond our 3rd tire downtrend line could result in a retest of November and October highs with the possibility of more accelerated immediate-term gains. Unfortunately for bulls, the EUR/USD was negated by our 3rd tier downtrend line and 1.50 on Monday, telling us the 1.50 zone continues to have a psychological impact on the currency pair. As for the downside, the EUR/USD has built up a solid support system considering the rally since November lows. Therefore, the EUR/USD has multiple uptrend lines serving as technical cushions along with 11/12 and 10/27 lows. Meanwhile, investors should keep an eye on the S&P's interaction with its psychological 1100 level because a topside breakout in the S&P could bring the EUR/USD along for the ride due to their positive correlation.

Present Price: 1.4927

Resistances: 1.4942, 1.4952, 1.4967, 1.4992, 1.5018, 1.5036, 1.5049

Supports: 1.4919, 1.4905, 1.4883, 1.4856, 1.4825, 1.4813

Psychological: 1.50, November Highs and Lows

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