EUR/USD: 1.3040The Euro has been reasonably steady against the dollar today in a session that saw it rise mildly , early on, due to the better than expected EU services PMI, only to drift a little lower later, when the US ISM Non manufacturing PMI came in a bit stronger than had been expected, giving the dollar a boost. The Euro is now pretty much unchanged from this time yesterday and the bigger news of the day came from the Dow, which after weeks of chopping around, finally reached an all time high. In futures terms it has reached 14267. The S+P has so far been to 1541- still 30 points from its 2007 high.
Technically little has changed for the Euro apart from the fact that it has been to the minor 1.3070 (high 1.3074) resistance, from where it has backed off for the time being.
Should we see another test of this level, a break would take us towards, the 100 DMA, now at 1.3118 and possibly 1.3140 (23.6% of 1.3710/1.2966), while the top of the channel is now at 1.3215. In the short term the 4 hour charts are showing some mild positive momentum, which may drag the Euro a little higher, if only to give us better levels to sell into in looking for the greater move to the downside towards the medium term Head/Shoulder objective at 1.2840. A return towards 1.3100 would not surprise before we head lower.
On the downside, below today’s 1.3010 low would find bids at Friday's base at 1.2965 and below here, 1. 2915 is the 76.4% Fibo support of 1.2660/1.3710. If we trade below this, 1.2875 (50% of 1.2042/1.3710) lies ahead of the H/S objective at 1.2840 , which in turn, is backed up by the 200 DMA at 1.2830, so the support in the 1.2830/75 area is going to be strong and would suggest a good area to buy back some shorts.
Today, I suspect that we are in for another tight session, probably rangebound, ahead of the ECB rate decision tomorrow, although today's EU GDP could provide some interim volatility. With the NFP looming on Friday I don,t think we are going anywhere too far and in the meantime, use 1.3000/1.31000 as a guide
Economic data highlights will include:
EU GDP, US ADP Employment, Beige Book.
