AUD/USD: 0.9650EUR/USD: 1.3080After a very quiet Asian session the Euro found some mild legs following the improved Spanish jobs data, where unemployment fell by 1.97% in May, but that was really about it in what has generally been a very quiet session, with the Euro again capped at 1.3100. The only other data of interest saw the U.S. trade gap widen in April to USD40.3 bio from USD37.8 bio in March, below estimates for a USD41 billion deficit, and focus now turns towards today's EU GDP, Retail Sales and US ISM Services PMI and ADP employment data.
Technically, having spent the session in a 60 point range, nothing has really changed and we remain stuck fairly close to 1.3100. The 4 hour charts are flattening out a little and have lost some of the upside momentum, having previously broken the down trending resistance from the 1.3710 Feb high and the Euro remains below yesterday's peak of 1.3107 (38.2% of 1.3710/1.2742). This won’t be easy to overcome, with further sellers to be found at the 100 DMA, now at 1.3110, but if we do head higher, look for a run towards minor resistance in the area between 1.3175/90. Above 1.3200 we could test 1.3242 (1 May high), above which, as I have previously said, I would start to become a little nervous of the medium term Euro bearish view. Until then we remain with it.
On the downside, there is minor Fibo support at today's low of 1.3040, with the 200 DMA adding support at 1.3020, although if this gives way, I suspect we would head back to/below 1.3000 and the 55 DMA at 1.2975. Below this would head to 1.2940 (minor) and then at 1.2900. Back below here would see another attempt at the strong 1.2820 and a break would head towards 1.2800 (17 May low@ 1.2796). Under this, 1.2740/70 will continue to see plenty of buyers and I don’t think we are ready for it yet. 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 at 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.
A neutral stance is required today, but I still prefer selling into rallies above 1.3100 with a SL somewhere above 1.3250.
Economic data highlights will include:
EU Services, Composites PMI’s, EU GDP, Retail Sales, US ADP Unemployment, Factory Orders, ISM Non -Mfg PMI, Beige Book
