AUD/USD: 0.9520EUR/USD: 1.3520The Euro held on to the support in the 1.3460/70 area today and climbed to as high as 1.3547 on the back of stronger than expected German industry orders (+3.3% v expectation of +0.5%) that reinforced expectations that the ECB will not cut rates at today's upcoming meeting despite the recently released steep fall in inflation.
Earlier in the European session saw the release of the EU Services PMI (51.6 v 50.9 exp) which came in generally a little bit stronger than expected, with Germany leading the way (51.6 v 50.9 exp) while Italy was the only individual component below expectations (50.5 v 51.2 exp).
A separate report showed that EU retail sales fell 0.6% in September, compared to expectations for a 0.4% decline but was largely ignored by the market.
The upside for the Euro does look to remain somewhat limited, probably to around 1.3600, given the mixed nature of the momentum indicators, and although the ECB look unlikely to cut rates today, it appears that the outlook from Mario Draghi at the press conference will be rather dovish with a good chance the ECB could pull the trigger in December if the data remains weak.
On the topside, having spiked up to 1.3546 today, the Euro has come back to sit below 1.3530 (23.6% of 1.3833/1.3441). 4 Hour momentum does still point higher though and above the session high would suggest a run towards 1.3590 (38.2%). Above 1.3600, would see sellers emerge ahead of 1.3635 (daily Kijun) which is currently looks safe but may come under pressure later in the day if the US GDP is a weak reading.
On the downside 1.3500 is now minor support ahead of the stronger 1.3460 (daily cloud top/weekly Tenkan) Below here would see further buyers at the Monday session spike low at 1.3441, where the major rising trend support now sits and therefore should be strong, although the shorter term momentum indicators currently suggest that we are unlikely to see a strong test of this level. If wrong, below here would see a move towards 1.3400 and under that would see a run towards 1.3377 (61.8% of 1.3105/1.3833) but not today I suspect.
Look for a range of 1.3480/1.3580 with a bias of trading from the long side, although ultimately it will depend on the ECB today. After the rate decision is announced, the session will see Mario Draghi's Press Conference, the US GDP and Personal Consumption data all being released at roughly the same time, so stay nimble!. It could be a busy day - let's hope so!
Economic data highlights will include:
ECB I/R Decision, German Curr/Acc, US GDP, Personal Consumption, Jobless Claims
