AUD/USD: 0.9215EUR/USD: 1.3100The U.S. dollar put in its best performance in almost a year last week, while US Treasury yields had their strongest weekly rise in a decade as the market continues to digest the outcome of the FOMC meeting. Accordingly the Euro remained under pressure, not helped by a renewal of worries over the situation in Greece, where one of the coalition government's partners has withdrawn its support after the state broadcasting companies was shut down, and there are now worries over the ability of the country to finance its bailout repayments.
Next week promises to be another volatile one and there is plenty of data coming up. The rise of concerns over a credit crunch in China also need to be monitored, although on Friday short term rates eased a little and helped calm some of the nerves. There looks to be little relief early in the week and the dollar is opening sub 1.3100 this morning.
Technically the Euro is approaching some important support at around 1.3075/85 where the 55, 100, 200 DMA's are all converging and is also 23.6% of 1.2042/1.3710. This then should be strong, although if broken, then the Euro will head fairly rapidly towards the rising trendline / 50% Fibo support at 1.2870. Interim support will come at 1.3032 (61.8% of 1.2796/1.3415) and 1.2936 (76.4%)
If the Euro can find some legs, then a bounce would find sellers at minor Fibo levels located at 1.3170, 1.3220 and 1.3255. I don't see us going this high for a while although the short term charts are a little oversold and showing some bullish divergence and we could see levels nearer to 1.3200 to sell into on Monday.
In the longer term, although the dailies are pointing lower, and I do expect an attack on 1.3075 and possibly 1.3000, the weeklies are flat, so I think we should expect some more choppy consolidation as we head into the North hemisphere summer and that the 1.29/1.34 range is going to continue to hold it. Another factor to suggest that we should not become too carried away on the downside for the Euro at present, is the lack of any real follow through to the upside in Usd/Chf which closed the week below the previous day's high.
In the world of Ichimoku, weekly Tenkan support is close by at 1.3100, below which there is nothing to hold it until the daily cloud top at 1.3030 and then the weekly cloud top at 1.2830.
For Monday I think we sell the approach to 1.3200 (should we see one), with a SL placed just above, looking for a run to 1.3075 and possibly lower.
Economic data highlights will include:
M: German IFO Business Climate, Chicago/Dallas Fed Business, Mfg Activity
T: US Durable Goods, Case Schiller House Price Index, Consumer Confidence, New Home Sales, Richmond Fed Mfg Index
W: German Consumer Confidence, US GDP, Personal Consumption
T: EU Council Meeting, German Unemployment, EU Business Climate, Industrial Confidence, Continuing Jobless Claims, Personal Income/Spending Pending Home Sales
F: EU Council Meeting, German Retail Sales, CPI, Chicago Purchasing Managers Index, Rts/Michigan Consumer Sentiment Survey
