AUD/USD: 0.9050EUR/USD: 1.3735The solid German IFO and the mixed EU CPI largely negated each other, leaving most majors unchanged today. European, and later, US equities moved higher, pulling the Aud and Kiwi along with them as risk appetite improved. Today sees Germany GDP, EU economic forecasts and US consumer confidence. There is another bout of cold weather coming in the US, which could again herald some soft US data and may keep the dollar under some pressure. Yellen to testify on Thursday.
EURUSD:
Another quiet start to the week saw the Euro take a slightly bid tone, after the better than forecast German IFO (111.30 v 110.6 exp) saw it head to 1.3770, but that was as good as it got, and it turned lower once again on the release of the EU CPI numbers. Although the annualised figure was, as expected, 0.8%, the monthly figure was very soft at -1.1% and saw the Euro dip quickly to a session low of 1.3707, where it once again found buyers, and is currently pretty much unchanged from the weeks opening levels. The ECB's Visco was quoted as saying that the Bank are ready to consider negative depo rates at the March 6 meeting which did nothing to help the Euro and could continue to act as a cap in the coming sessions.
Today, the EU will once again be the focus with the German GDP and EU economic forecasts due to be released. Later, from the US, the Consumer Confidence will be closely watched as well as some housing data and also some regional Fed manufacturing numbers, which are also due.
Technically there is little change today and the short term charts are all pretty flat, requiring a fairly neutral stance. The dailies though, do still point higher and so we could yet put the 1.3770 sellers under pressure, and may yet want to take a look at the important trend resistance at 1.3830. More cold weather in the US, which is predicted, could again put the dollar under some pressure.
Having held above 1.3700 (38.2% of 1.3476/1.3772 & 200HMA) again today, the Euro sits above the strong support at Thursday’s low at 1.3685 (50% pivot of 1.3476/1.3772). If seen, this area would continue to attract decent buyers which is backed up by support at the top of the daily cloud/daily tenkan at 1.3670 and Fibo support at 1.3660 (38.2% of 1.3476/1.3772). I don’t really see it below here in coming sessions, but if wrong, look for an acceleration towards the weekly tenkan now at 1.3650 and the 1.3625(daily Kijun/50% of 1.3476/1.3773).
On the topside, 1.3770 capped it once again today. Above there would head towards 1.3800 and then to the major descending trend resistance at 1.3830 (also 61.8% of 1.4939/1.2042). A break of this area would be fairly pivotal for the Euro, as I suspect we would then be headed towards 1.3892, (Dec high) and then possibly on to 1.4000 although this is still some way off and I would not expect it in the next few days.
Look for more choppy trade within 1.3700/1.3770 today, with half a chance of testing the downside, possibly to 1.3685, although this will be dictated by the data. The DXY is currently at 80.21, unchanged from yesterday, but holding the important support at around 79.95 (200 WMA and the multi-year rising trend support).
Economic data highlights will include:
German GDP, EU economic forecasts, US Consumer Confidence, Case/Schiller House Price Index, Richmond Fed Mfg Index.
Jim LanglandsFX Charts PL
