AUD/USD: 0.8890EUR/USD: 1.3600The Euro remains under some pressure today after the ECB, as expected, left rates unchanged, although the market noted Mario Draghi’s comments that the ECB is prepared for further easing if necessary. He noted that the risks on economic outlook are "on the downside" and outlined two potential triggers for further action, saying the ECB would try to fight further falls in inflation and any unwarranted rise in money market rates. The Euro having spiked briefly to 1.3632 then fell hard to a low of 1.3548 and has ended up settling pretty much unchanged from this time yesterday as focus now turns towards today’s US Jobs and NFP data (exp 7.0%/+195K). Ahead of that the EU GDP could cause some volatility.
There is really no change to the technical outlook today and despite the brief spike lower, the 1.3560 support level, where the daily cloud top lies is still holding, as is the rising trend line although it is looking rather precarious. Below this would again head towards the further decent support at 1.3545/25 area (100 DMA, 61.8% of 1.3294/1.3892,) ahead of 1.3500. Further out, 1.3455 (23.6% of 1.2042/1.3892 & 38.2% of 1.2755/1.3892) and 1.3435 (76.4% of 1.3294/1.3892) will see further buyers, albeit that this appears some way off.
On the topside, back above 1.3600 will once again head towards the session high at 1.3632 (1.3630: 23.6% of 1.3892/1.3548) ahead of further sellers likely to be seen at 1.3650 and 1.3675.
All will depend on the US data later today, but the indicators generally are a little mixed so a degree of flexibility is required. While the dailies still look soft, the 4 hour charts do not suggest an aggressive move lower today, but as with last weekend’s outlook, I still think that being long dollars is the way to go in the medium term and suspect that eventually we are looking at the Euro to be trading back at 1.3400/50 area, albeit possibly not until next week.
Economic data highlights will include:
EU GDP, US Unemployment, NFP.
