EUR/USD: 1.2527There is very little to add today ahead of the Federal Reserve symposium when Ben Bernanke will finally reveal whether or not further economic stimulus will be implemented through QE3. Until he speaks on Friday there will be nothing going on and the markets are very thin, with little interest and even less volatility.
Today’s data was slightly better than expected with the US GDP at 1.7% coming in pretty much on expectations and Pending Home Sales +2.4% (against expectations of +1%), further hinting that the housing market may be over the worst of its problems. The Beige Book caused no market reaction, although it said that the economy continues to gradually expand in most areas and that credit conditions have improved marginally.
So the situation remains the same and we sit in limbo, although as I said yesterday, there is a growing view that QE3 may again be delayed which would see the dollar regain some of its recent lost ground.
For now 1.25/1.26 should continue to cover it, with a mild bias lower, and further out the points to watch remain pretty much unchanged.
Short term resistance is now to be found at today’s high of 1.2573 and then at 1.2589 (23 August high), above which we run into the 100 DMA now at 1.2593. Greater resistance lies at the converging channel resistance currently in the 1.2640 -1.2650 area ahead of Fibo resistance at 1.2720 (23.6% of 1.4935/1.2042).
The downside, has minor support at the rising trend line, currently at 1.2515 and then at yesterdays day’s low of 1.2465 (23.6% of 1.2042/1.2589). Below this 1.2392 (50% pivot of 1.2742/1.2042) comes into play, where the channel base also now lies.
German Unemployment and US Personal Expenditure are todays highlights.
