AUD/USD: 0.9635EUR/USD: 1.2935Of note, were comments from the Cypriot Finance Minister who suggested that the tough times in Cyprus are likely to continue and will get worse before they improve. That being about the highlight, it is unsurprising that the Euro has been stuck in a 30 point range today and that all the chart points remain intact.
Mild falls in Italian and Spanish borrowing costs had earlier helped the Euro to session highs at 1.2948 but there was no follow through and it has since drifted a little lower.
We need to break above the session high of 1.2948, and then minor 1.2970 resistance, in order to make an attempt on the 1.2990/00 area that was tested a couple of times last week, where further sellers will line up at 1.3000/10 (200 DMA: 1.3007), and so should be strong.
The short term charts are pretty flat so I think we are in for more of the same today, with the immediate bias looking as though we could try for an attempt on the 55 DMA (1.2983) and possibly the 200 DMA for a move towards downtrend resistance at 1.3075. Above this would see acceleration towards 1.3175 and potentially 1.3242 (1 May high) although these levels look pretty safe, at least early in the week.
On the downside, back below 1.2900 would see further choppy trade above 1.2820, a break of which would tend towards 1.2800 (17 May low@ 1.2796). Under here 1.2740/70 will continue to see plenty of buyers and, as with yesterday, I don’t think we are ready for this yet, but I would be doubtful of going below here at the first attempt. If/when we do get there, look for further bids at the 50% projection of the decline from 1.3710/1.2744 from 1.3242 at 1.2758 and then the 1.2744 4th April low. Below this there are minor supports at 1.2685 and at 1.2660 but not too much to hold it ahead of the 61.8% projection at 1.2645.
There is no data of any real importance out of Europe today and thus it could be pretty flat until the US Consumer Confidence data which will be the main driver.
I suspect that it will essentially be rangebound again and given that the dailies appear to be turning to point very mildly higher, would therefore use 1.2890/1.2990 as a rough guide. If we head back below the 1.2860 level today, I suspect I would be wrong in the mild bullish view, so SL should be kept pretty tight below here. I think though, that we are in for a test of 1.3000 sooner or later, but in the next 24 hours there are probably better things to look at than the Euro.
Economic data highlights will include:
US Consumer Confidence, Case Schiller Home Price Index, Richmond, Dallas Fed Mfg Index
