EUR/USD: 1.2735The Euro has ground mildly higher today, despite strikes and violent protests against the austerity being imposed across various European countries. The never-ending wait for some progress on the situation in Greece continues and in the meantime traders are reluctant to put on too much risk one way or the other and it has therefore been yet another day of consolidation and sitting on hands.
The release of the FOMC minutes suggest that there was some support for further QE. This has seen the dollar trade a little weaker at the time of writing and has taken the Euro up to the 1.2770 resistance (high, 1.2778) before drifting back into the NY close and currently sits at 1.2735.
Technically the Euro has done pretty much as we expected and has allowed the charts to unwind themselves a little.
There is now minor support at 1.2730 and then at 1.2700 ahead of yesterdays 2 month low at 1.2660. A retest and break of this would head towards the 100 DMA, now at 1.2637, with the next support at around 1.2607 (50% of 1.2042/1.3171). Below this would suggest deeper declines to wards 1.2475.
While the dailies are still pointing lower, the MACD,s are flattening out a little and the stochastics and RSIs are getting into oversold territory so further downside progress will remain slow. The 4 hour charts continue to show some bullish divergence, although this has now largely unwound itself, so I remain wary of further bounces, towards 1.2800. Sell orders have now been filled in the 1.2740/60 area, although another short squeeze could take us back up to 1.2770 (23.6% of 1.3171/1.2660) ahead of the 9 Nov high at 1.2791 high and then possibly onto 1.2838 (38.2% of 1.3171/1.2660). Beyond there, looks unlikely right now, but the greater trendline resistance is now at 1.2907.
Today I suspect we may see the Euro continue to grind mildly higher but overall 1.27/1.28 looks likely to cover it again.
Today sees EU GDP and CPI as well as US CPI.
