EUR/USD: 1.2820The Euro has spent the session marking time ahead of tomorrow's ECB I/R decision and Friday's US Jobs/NFP data, although it is under some pressure following the weak PMI and continuing poor employment data. The EU manufacturing PMI was revised slightly higher to 46.8 in March but this was still much worse than February's 47.9, while unemployment was unable to make any headway at all and remains unchanged at 12%(19 million).
It has been a relatively quiet session though, and has so far held on above 1.2800, with slightly more positive news from Cyprus partly offsetting the weaker EU data. It is reported that the Cypriot government is negotiating easier bailout terms with EU and IMF, and is seeking to have an extra year to return to primary budget surplus.
Technically, not too much has changed today, and with an early session rally up to 1.2877 having been rebuffed, the Euro continues to trade within the channel. The 4 hour charts are pretty flat and so for the time being a neutral stance is probably the best bet. The channel top is now at 1.2845, which is not far away, and above there today's high is where the 200 DMA also lies and will be tough to break. If we were to succeed in doing so, expect further gains towards good sellers reportedly lined up in the 1.2890/00, beyond which the Euro would head to 1.2970 (23.6% 1.3710/1.2750).
To the downside, there will be some buyers at 1.2800 and again at yesterdays 1.2770 low, below which the 27 March base at 1.2750 will see bids, ahead of 1.2700 and the important 1.2680 support (61.8% of 1.2042/ 1.3710, and also the base of the weekly Kumo cloud).
Overall I think we are probably in for more consolidation ahead of the ECB tomorrow and with little data of importance out today I don't think we are heading too far from 1.2800.
The ADP will be worth watching (exp +200K) as a guide to Fridays US Unemployment (exp Unch, 7.7%) and NFP data (exp +200K) and may provide some volatility if the final figure is wide of the mark..
Economic data highlights will include:
EU CPI, US ADP Employment data.
