AUD/USD: 0.9330EUR/USD: 1.3795Thin trade dominates and most currencies are reasonably stable to start the week. The Ukraine situation has traders on their toes, after some pro-Moscow separatist gunmen took over a building, but has otherwise seen little new news to push markets one way or the other today. It looks as though it could be a reasonably steady start to the week, although there will be bits and pieces of data out over the next few days to provide direction. Today the focus will be on the EU Consumer Confidence, US Existing Home Sales and Richmond Fed Mfg Index.
In the absence of any major market moving news, the currency markets have been reasonably stable today in thin holiday conditions, but with one eye on the developments in the Ukraine, which do not appear to be improving.
The Euro had earlier attempted a squeeze up to 1.3823 but is finishing the US session near its lows, with the technical indicators beginning to suggest that it could be the downside that comes under further pressure in the days ahead.
The daily cloud top at 1.3800 is under pressure, and the US close below this (currently at 1.3795) may see a push to test stop-losses placed below 1.3780. If this gives way - and both the 1 and 4 hour indicators suggest that it might be a possibility - there will be minor bids at 1.3760 (61.8% of 1.3672/1.3905) and 1.3730 (76.4%). Rising trend support also lies near here and should provide reasonable support, below which the 100 DMA/daily cloud base both lie at 1.3720. A break of 1.3700 could bring a deeper decline, and apart from some minor Fibo levels, there is not too much to hold the Euro up ahead of the 200 DMA at 1.3568. This is some way off though I think.
A return to the topside will see sellers at the day’s highs at around 1.3825, above which would see offers at 1.3850/60 and then more at last week’s peak at 1.3900.
I would not be looking for too much today, although rallies appear to be a sell opportunity, with the chance of seeing 1.3700 later in the week.
Use 1.3760/1.3815 as a guide.
Economic data highlights will include:
EU Construction Output, Consumer Confidence, US Existing Home Sales, Richmond Fed Mfg Index.
Jim LanglandsFX Charts www.fxcharts.com.au
