AUD/USD: 0.9355EUR/USD: 1.3410The Euro has traded within a 1.3334/1.3415 range today in a consolidative session, largely driven by action in the crosses, allowing the short term charts to correct in light trade due the absence of NY, who were out for the Veterans Day holiday.
The longer term trend would appear to remain lower for the Euro, with the US$ retaining an underlying bid tone against most currencies and today’s direction will be derived from the German CPI data.
Technically, there is not too much change from yesterday, with the 4 hour charts suggesting that we could be in for some more action near 1.3400, with a chance of squeezing a little higher, perhaps towards 1.3420 (23.6% of 1.3832/1.3294) above which there is minor resistance at 1.3450, and then 1.3497 (38.2% of 1.3832/1.3294) is the next Fibo level, which I am dubious of seeing.
On the downside, although the Euro has tested it today, it is still managing to hang on above the 100 DMA at 1.3342. A break would head towards Thursday’s low of 1.3294 (Weekly Kijun: 1.3287), below which 1.3274 is 76.4% of 1.3105/1.3832. Beneath there would see a run back towards the 2000 DMA at 1.3216 and under that, it would begin to look as though are going to retrace the whole of the move higher that began at 1.3105.
In Ichimoku terms, we are still above the base of the daily cloud (1.3373), and until we get a daily close below it, I would just remain a little wary of a bit more of a bounce, with the top of the cloud currently at 1.3465, which would prove an added hindrance to further topside progress.
For today, I think we should look for a bit more of the same with the 4 hour charts suggesting that we could yet squeeze a little higher before the downtrend continues, as the daily charts suggest will eventually happen.
I would use 1.3360/1.3460 as a guide with a preference to sell into short term strength in preparation for the resumption of the medium term US$ uptrend.
Economic data highlights will include:
German CPI, Chicago Fed National Activity Index
