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30 Apr 2013
Forex: EUR/USD closes at 1.3100, just ahead the 1.3115 key price
FXstreet.com (San Francisco) - The Euro opened the week with a good note against the Greenback as the EUR/USD rose to trade at 1.3115 on the Monday's session. Currently the pair is trading at 1.3100, focusing on ECB's Thursday monetary policy meeting and extending recovery from April 24th low at 1.2955.
The EUR/USD is trading 0.38% above Monday's opening price, the pair is moving slightly bearish according to the FXstreet.com's trend index with indicators such as the CCI and the Momentum pointing south while the Stochastic is neutral and the MACD is bullish in the 1-day chart.
According to the FXstreet.com analyst's Valeria Bednarik, "a break above 1.3115 should signal an upward continuation up to 1.3150 price zone, probable top for today, while a retracement back below 1.3070 will likely see the pair addressing back towards the 1.3010/40 price zone."
Market performed a green Monday as news from Europe and well above expectations US Housing economic data fueled investor’s confidence. However, Income data in the United States came below expectations but spending posted above consensus.
The big bank week
Markets are focused on a busy week. Besides the unemployment dramatic data in the Eurozone, the Chicago PMI and the ISM manufacturing report, there are the monetary policy meetings in the United States and the Eurozone to close the week with the US employment report.
With the recent US GDP data below expectations at 2.5%, it seems the Fed will maintain the status quo with its never ending QE. However, the picture in Europe is different. Market is speculating for a rate cut. Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that FOMC's meeting is widely expected to be a non-event.
In the European side, Juckes writes that the “monetary easing hopes are instead centered on the ECB. While there is widespread speculation about the possibility of a 25bp rate cut by the ECB, it is also widely agreed that such action would not have much impact beyond a psychological one. More useful would be further non-standard measures to address the financial fragmentation in the Euro area and the continued deleveraging in the periphery.”
In the same line, BK Asset Management's analyst Kathy Lien doesn't expects "much from the FOMC statement. Instead, non-farm payrolls will be the number to watch." The market consensus on NFP is about 160K new payrolls in April, well below 2012 average of 180K. In this line, Lien states that "the performance of the dollar could be mixed in the coming days depending upon how Chinese, U.K. and Australian data fare and whether the ECB cuts interest rates."
The 1.3115 Fibonacci level
The EUR/USD is trading currently at 1.3100 after testing the 1.3115 key level. Bednarik points that the EUR/USD is bearish yet and she adds that it seems that a bunch of stop orders and option barriers are below 1.2950. "Once below this last, the slide could easily extend towards 1.2740/50 area next week, but if this last gives up, then get ready for a run towards sub 1.26 level this May."
To reverse this actual bearish tone, "price needs to establish above the 1.3115 resistance, 38.2% of the same Fibonacci rally, with scope then for a retest of 1.3200," continues the FXstreet.com analyst. "However, only steady gains above 1.3230, will provide basis for a bullish midterm case, with 1.3510 then at sight."
The EUR/USD is trading 0.38% above Monday's opening price, the pair is moving slightly bearish according to the FXstreet.com's trend index with indicators such as the CCI and the Momentum pointing south while the Stochastic is neutral and the MACD is bullish in the 1-day chart.
According to the FXstreet.com analyst's Valeria Bednarik, "a break above 1.3115 should signal an upward continuation up to 1.3150 price zone, probable top for today, while a retracement back below 1.3070 will likely see the pair addressing back towards the 1.3010/40 price zone."
Market performed a green Monday as news from Europe and well above expectations US Housing economic data fueled investor’s confidence. However, Income data in the United States came below expectations but spending posted above consensus.
The big bank week
Markets are focused on a busy week. Besides the unemployment dramatic data in the Eurozone, the Chicago PMI and the ISM manufacturing report, there are the monetary policy meetings in the United States and the Eurozone to close the week with the US employment report.
With the recent US GDP data below expectations at 2.5%, it seems the Fed will maintain the status quo with its never ending QE. However, the picture in Europe is different. Market is speculating for a rate cut. Kit Juckes, Global Head of Currency Strategy at Societe Generale notes that FOMC's meeting is widely expected to be a non-event.
In the European side, Juckes writes that the “monetary easing hopes are instead centered on the ECB. While there is widespread speculation about the possibility of a 25bp rate cut by the ECB, it is also widely agreed that such action would not have much impact beyond a psychological one. More useful would be further non-standard measures to address the financial fragmentation in the Euro area and the continued deleveraging in the periphery.”
In the same line, BK Asset Management's analyst Kathy Lien doesn't expects "much from the FOMC statement. Instead, non-farm payrolls will be the number to watch." The market consensus on NFP is about 160K new payrolls in April, well below 2012 average of 180K. In this line, Lien states that "the performance of the dollar could be mixed in the coming days depending upon how Chinese, U.K. and Australian data fare and whether the ECB cuts interest rates."
The 1.3115 Fibonacci level
The EUR/USD is trading currently at 1.3100 after testing the 1.3115 key level. Bednarik points that the EUR/USD is bearish yet and she adds that it seems that a bunch of stop orders and option barriers are below 1.2950. "Once below this last, the slide could easily extend towards 1.2740/50 area next week, but if this last gives up, then get ready for a run towards sub 1.26 level this May."
To reverse this actual bearish tone, "price needs to establish above the 1.3115 resistance, 38.2% of the same Fibonacci rally, with scope then for a retest of 1.3200," continues the FXstreet.com analyst. "However, only steady gains above 1.3230, will provide basis for a bullish midterm case, with 1.3510 then at sight."