EUR/USD: 1.3075The Euro spiked higher to 1.3134 after the much improved German March Industrial Production figures (+2.2%m/m. vs -0.5% exp) today. An improved Portuguese bond auction helped things along and the Euro headed into resistance near 1.3140 before reverting lower again later in the session as the market returned to focus on the overall outlook for the contracting EU economy and Mario Draghi's recent reminder that the ECB is ready to act again, if necessary, by cutting rates and potentially imposing negative deposit rates in the EU.
Looking ahead, things are a bit thin on the ground today, with just the German CPI to provide the volatility, although before then we get the Chinese Trade Balance which could provide some mild interest.
Technically, little has changed and we remain within the range of recent days, with bids at the session low/uptrend support at 1.3067, while offers will appear at the descending resistance, now at 1.3130. It won't take long to break one way or the other, although the charts are flat and giving little hint in which direction it might eventually move. I suspect we will head lower, but it is pretty much 50/50 and there will be plenty of bids at 1.3025 (55DMA), 1.3000 and at 1.2970, so progress, if seen, should be slow.
The upside will have sellers at 1.3130/40, ahead of the 100 DMA at 1.3155, with further sellers to be seen at 1.3180 and 1.3200.
I think it best to use the same plan as yesterday and trade the range of 1.3000/1.3140, with the same preference for selling into the strength above 1.3100. With France closed today for VE Day and then with France, Germany, Switzerland - amongst others - closed tomorrow for Ascension Day, don't expect too much excitement.
Economic data highlights will include:
German CPI.
