EUR/USD: 1.3010Having gapped lower to open the week at 1.2975 the Euro squeezed slowly higher as Europe opened, brushing off the weaker EU Sentix investor confidence reading of -17.3 (exp -13.1) and the German IP release for Feb (+0.5% against exp +0.3%, although the previous release was revised to -0.6% from 0.0%) and hung around in early Europe near 1.3000.
With all eyes on the Yen, the European currencies have been fairly stable and after squeezing up to just shy of the 1.3040 resistance (high 1.3037) the Euro has since drifted a little lower in relatively quiet trade, with the issues in the EU, - today being Portugal's turn, - capping further upside gains.
Apart from a speech from Bernanke, today is going to be a fairly empty day of data and it should again be a fairly stable session so I would not be looking for too much in either direction.
Today's high at 1.3037 and Fridays 1.3040 high (and the 25 March high at 1.3050) will continue to cap rallies, although a break would see a further squeeze that could test 1.3112 (38.2% of 1.3710/1.2745). Above that may be a bit of a struggle, given the shape that the EU is in, but further points to watch would be at the 100 DMA (1.3130), 1.3156 (27 Feb high) and 1.3226 (50% Fibo).
The immediate support on the downside is at today's 1.2965 low. Below this would take us back to 1.2927 (38.2% of 1.2745/1.3039) and then to 1.2892 (50%) and possibly 1.2856 (61.8%).
The Us$/Chf 4 hour charts look a little more mature than the Euro, in that the MACDs appear to hint at mild dollar strength ahead. The Euro charts are not really suggesting this yet, but could well turn a bit lower and thus I would tend to look for a similar range to yesterday of 1.2930/1.3050, with a mild bias to retesting the downside.
Economic data highlights will include:
Bernanke Speech, German Trade Balance.
