EUR/USD: 1.3235
May Day has ensured that markets have been thin today and the markets have consequently been rangebound, with the Euro pretty much unchanged from yesterday’s levels. The only real point of interest has been the US ISM manufacturing index which rose to 54.8 from 53.4, against expectations of 53.0. Equities moved higher with the S+P breaking the 1400 level, closing up 0.57% and is a welcome change, following the recent run of softer data coming out of the US.
The Euro had been eating away at resistance towards 1.3290 (high 1.3283), but the stronger ISM saw it drop immediately back to the day’s low of 1.3203, from where it has consolidated ever since.
So there is really nothing to add on the technical side. The Fibo resistance at 1.3290, (76.4% of 1.3384/1.2994) still stands. As I said yesterday, it will not be an easy one to break either, being the downtrend line from 1.3480. Above 1.3300, things would become a little messy, but if seen, it could be that we get a run towards 1.3380, the previous 27 March high. Right now I am doubtful of this outcome – at least for the time being.
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 trendline) 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.Once again we look to be in for a rangebound session, although I suspect a test of the downside may possible eventuate as the 4 hourlies look to be turning a touch lower. Having said that I would not read too much into it and as with yesterday, 1.3200/70 would not surprise me. Further out we may want to make an E leg lower, within the current triangle, back towards the 1.3000 area, but that is a ling way off at this stage.
Today’s Economic highlights will be the German Manufacturing PMI and EU Unemployment Data and then the USD ADP employment figure which will provide a lead, going into Fridays NFP.
