EUR/USD: 1.2960Despite New York reopening today, it was unable to provide any real stimulus to the market, which continues its consolidation and somewhat weighed down by the ongoing issues of whether Greece will agree to the necessary reforms in order to receive the next tranche of its bailout package and over whether Spain will eventually ask for financial assistance. The EU unemployment rate has hit a record high at 11.6% with 18.5m people out of jobs and did little to help the cause for the Euro and needless to say, Spain and Greece have been hardest hit.
Despite early enthusiasm for the Euro, no positive news has been forthcoming and having reached 1.3020 it has since retreated back into its well worn range, weighed down in part today by lower European equities (Dax -0.33%, CAC-0.87%) and continues to chop around aimlessly between 1.2900-1.3000.
We may get some volatility later on, commencing in Asia, when the China (and most of Asia) manufacturing data is released, and which will be followed up later in the session by a load of economic guidance from the US, including the ISM manufacturing PMI, as well as the ADP employment data which comes in ahead of the Non Farm Payrolls tomorrow.
Technically, despite the brief foray to 1.3020, little has really changed for the Euro and having tested the 25 Oct high of 1.3022, but so far failing to overcome it, this now becomes quite a hurdle ahead of the long term descending trendline now at 1.3060, which should prove strong. An unlikely break would see the 17 Oct, 1.3140 high, which is also 38.2% of 1.4939/1.2042.
On the downside, the Euro will continue to see good bids in the 1.2880/90 range, below which are stops that could take the Euro down to the 200 DMA at 1.2832, although possibly not today. This has held firm on previous attempts and it sits above the 1st Oct low at 1.2802, so should be strong at the first crack at it. A break would suggest further declines towards 1.2740/10 area, but I don’t see this yet.
The 4 hour indicators are flat, although the hourlies suggest we may now have a bit of a drift towards 1.2900, and with the dailies still pointing lower I suspect any upside movement may be limited. Use 1.2900/1.3000 as an ongoing range today with Asia once again looking to be very quiet until the afternoon when the data is released, when the market will hopefully come out of its coma.
