EUR/USD: 1.3045The Dollar has pretty much consolidated its gains made late last week following Friday's good US Jobs data and has strayed not too far from 1.3000, although the Euro has squeezed a few weak shorts, triggering some stops up to a session high of 1.3042, before retreating back to 1.3035, having earlier in the session drifted to a low of 1.2979.
The market was largely unaffected by Fridays Italian Credit downgrade, the softer Chinese data or today's German Trade balance that narrowed to a surplus of EUR 15.7 Bio, which was largely as expected and passed by, largely unnoticed.
There are plenty of sellers between 1.3050/65 now, and this may prove difficult to overcome in the day ahead, (1.3065: 61.8% of 1.3133/1.2954) although above here could take us back to 1.3100 and towards Friday’s high at 1.3133.
On the downside, 1.3000 will continue to act as a short term pivot ahead of today's low at 1.2980 and then Fridays base at 1.2955. I would be doubtful of going below this today, but further out, the weeklies continue to point south and eventually the downside should resume. Back below 1.2955 would lean towards 1.2915 (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 1.2838, so the support in the 1.2840/75 area is going to be strong and would suggest a good area to buy back some shorts. The base of the descending channel is now at 1.2800 which could take a while, if at all.
As for today, the German CPI will be the highlight and the very short term indicators suggest a little more Euro strength. Progress may be slow beyond 1.3100, if indeed we see it, and I would imagine that we may see another session not too dissimilar to yesterdays, with a slightly higher bias.
Economic data highlights will include:
