EUR/USD: 1.3320It has been another choppy, but pretty much directionless session for the Euro, which for the time being seems reluctant to move too far from 1.3300. In the absence of any major data there has been little to drive the markets around, apart from the IMF trimming its 2013 global growth outlook from 3.6% to 3.5%, and it has been a pretty tedious session, although the Euro did drop in a vacuum at one stage, from 1.3340 to 1.3263, before recovering.
Mario Draghi has been speaking, and once again was reasonably upbeat about the EU's prospects for 2013 and ensured that the Euro has held above its recent technical support.
The coming session will focus on the Manufacturing and Services PMI data from across the EU and the US. Spanish unemployment data will also be released and won't be very pretty (exp 25%).
Technically, there is again no change and for the time being a neutral stance is required. The oscillators are all pretty flat and it could be another choppy affair so stay flexible, but sentiment does seem a little more supportive of the Euro. 1.3255 – last week’s low – remains intact and is the initial support ahead of 1.3248 (38.2% of 1.2997/1.3402). Below this would see a deeper setback towards 1.3200 (50%) and then 1.3150 (61.8%). The major trendline support, as seen by the ascending white line is now at 1.3040 an dis currently well out of reach.
If we do get a return to the topside, there is now short term resistance at around 1.3350 and then at 1.3402, last week’s high, above which would possibly accelerate towards 1.3485 (50% of 1.4939/1.2041) and even to 1.3547 (2 Dec 11 high), although this appears some way off at present.
We really need to wait for the European data to see the likely direction, although, as with previous days, I suspect that any short term Euro weakness towards 1.3200 may provide a buying opportunity for a return towards 1.3400 but overall I think the rangebound conditions are going to be with us for a while.
Economic data highlights today will include:
EU Flash Mfg, Services PMI’s, EU C/Acc, Spain Unemployment, US Flash Mfg PMI, Jobless Claims
