AUD/USD: 0.9130EUR/USD: 1.3580The Euro was mildly lower in thin trade on Friday after the EU CPI data turned out to be a bit of a non event, rising slightly more than expected in November by 0.9%, while EU Unemployment was slightly improved, at 12.1% (exp 12.2%).
With the US largely absent, there was little interest to get involved and most players were happy to sit on the sidelines, waiting for Thursdays upcoming ECB meeting and Interest Rate decision. No change is generally expected although there has been plenty of talk of negative rates, so Mario Draghi's press conference will be keenly awaited.
There will be plenty of data out before Thursday, starting with today's PMIs to keep the market on their toes but the Euro is just beginning to look a little heavy and early in the week it would appear that Friday's high of 1.3621 might prove a bit tricky to overcome.
Technically the points to watch remain pretty much unchanged, although the momentum on the shorter term charts is turning a little lower, suggesting that it may be the downside that comes under some pressure at the start of the week. 1.3560 will again provide the initial support, a break of which would see 1.3535 (38% of 1.3398/1.3618), a break of which would see a run back to 1.3510 (minor), 1.3485 (61.8%) and 1.3470 (rising trend support).
On the topside, above Fridays high, the Euro will run into sellers at 1.3627 (61.8% of 1.3832/1.3294) and then the descending trend resistance at around 1.3640. Above that there is further minor resistance at around 1.3650, beyond which could see acceleration towards 1.3710 (76.4%), but I cannot see that happening for the time being.
For Monday, look for 1.3610/1.3550 to cover the Euro with a mild preference towards selling into strength, although watch out for Bernanke who will be speaking during the Asian session, which may push the dollar around a bit. Later in the week, aside from the ECB, the US GDP and on Friday, the Unemployment/NFP will be the focus.
Economic data highlights will include:
M: EU Mfg PMI's, US Mfg PMI, Construction Spending, ISM Mfg PMI
T: EU PPI
W: German Services PMI, EU Composite/Services PMI, GDP, Retail Sales, US ADP Unemployment, US Trade Balance, ISM Non - Mfg PMI, Beige Book
T: ECB I/R Decision/Press Conference, US GDP. Jobless Claims, Factory Orders
F: German Factory Orders, US Unemployment/NFP, Personal Income/Spending, Personal Consumption, Consumer Credit, Rts/Michigan Consumer Sentiment Index
