EUR/USD: 1.3080The Euro has continued higher, taking out the 1.3050 resistance and heading on to 1.3100, helped in large part by Eur/Jpy purchases which have today pushed the cross to 130.00. The Chinese inflation data, which retreated from the levels of the previous month (2.1% against the previous 3.2%) also assisted the mood today, giving the risk trade a boost.
In what has been a relatively light news day, US stocks have again continued higher - again helped by the Chinese data, - with the Dow and S+P both making a new intraday all time high, helping to underpin the Euro.
Resistance at 1.3112 (38.2% of 1.3710/1.2745) is now not so far away, although the 4 hour charts are bullish and we could see a continuation of the current strength, particularly if Eur/Jpy purchases continue to underpin the Eur/Usd. The oscillators though are becoming overbought and both the RSI's and Stochastics do suggest that this move higher may be running out of a bit of steam so caution should be exercised on the topside. In the meantime the trend is higher and a break of 1.3110/15 may see a run on to the 100 DMA (1.3130), 1.3162(28 Feb high) and 1.3226 (50% Fibo).
The immediate support is now at 1.3050, 1.3020 and then at 1.3000. Below this would take us back to 1.2970 and then to 1.2925 (50% of 1.2745/1.3100).
Today is relatively data free until the FOMC minutes and it would not really surprise to see the Euro chop around at close to current levels until then although we get the Chinese Trade data today which could cause some volatility. Most of the action is likely to be around the cross, and now that Eur/Jpy is above 130.00 it looks as though it will carry on to higher levels and will ensure that dips in the Euro will see good demand.
Economic data highlights will include:
FOMC Minutes, various Fed board members speaking.
