EUR/USD: 1.3240
There really is not an awful lot to add on the Euro today. It has drifted mildly lower from the weekend close in what has been a quiet session, moving in a 58 point range.
The upcoming elections in France and Greece have ensured that the upside for the Euro is limited for the time being, while in the US, continued soft economic data does not allow the dollar to make any significant gains.
Spain has slipped back into recession as Q1 GDP contracted 0.3%, and the German Finance Minister has not endeared himself today with the Spanish public by stating that there is no alternative to the severe austerity measures that have been set out by the Spanish Government.
So while doing really very little, the market has taken a little risk off the board, following S+Ps downgrade of 11 Spanish banks, and equity markets are all mildly lower. The DAX finished -0.59% and the CAC -1.3%. In the US the S+P is down 0.4%.
So technically, little has changed from yesterday. Resistance remains in place at 1.3270. The daily charts have flattened out, but if we can break through this area, the next level will be at the Fibo Resistance which lies at 1.3290, (76.4% of 1.3384/1.2994). This should be strong at first attempt, being the downtrend line from1.3480. Above 1.3300, things become a little messy, but it could be that we get a run towards 1.3380, the previous 27 March high. Right now this doesn't look likely.
The downside continues to have support at around today’s low at 1.3205 (23.6% of 1.2994/1.3270)and then at, 1.3185 (rising trend line) ahead of Fridays 1.3156 low. Below here is 1.3131(50% of 1.2994/1.3270), and 1.3096 (61.8%) before 1.3050 (Head/Shoulder neckline). Beneath here will be plenty of bids between 1.2970/1.3000.
I suspect we are in for more of the same directionless trade for the coming session and a continuation of 1.3200/70 looks likely. It is Golden week, which means most of Asia are not playing(although everyone is present today, before further holiday celebrations later in the week), and it is also May Day, so some of the European Centres, including Germany will not be involved. The economic interest will come from the China Manufacturing PMI and then later in the day the US ISM Manufacturing Index.
I would not bother in getting too involved today.
