By Fast Brokers – The EUR/USD is heading lower today as investors snap up the Dollar across the board in reaction to stronger than expected U.S. economic data. U.S. Advance GDP printed 1.2% above analyst expectations, spurring a Dollar buying spree due to the comparative outperformance of America’s economy. In addition to the positive GDP number the U.S. also released better than expected Chicago PMI and Revised UoM Consumer Sentiment Data. The all around impressive U.S. data has sent the Dollar higher across the board while gold drops beneath $1075/oz. Therefore, the EUR/USD’s correlations are sending sell signals. However, today’s session has already been incredibly volatile and we’ll have to see how the remainder of the day plays out. Meanwhile, the Euro is flexing a been of a relative strength today as EU officials come to the defense of Greece while attempting to negate speculation that Greece may need to leave the union. That being said, the EU could be working on a bailout package to help ready the ship for a debt scare in Greece could spread to larger struggling nations such as Spain and Portugal. Greece has already seen its bond interest rates fly higher this week and the EU may need to make a decision soon to prevent the weakness from spreading. Therefore, investors should keep a wary eye on the newsier and monitor the EUR/USD for any sudden jerks while data releases are absent. Speaking of data, the EU will be relatively quiet on the data wire next week until Thursday’s ECB meeting. Therefore, activity in the currency pair should continue to flow with broad-based Dollar movements unless there is another key development concerning Greece.
Technically speaking, the EUR/USD faces topside technical barriers in the form of multiple downtrend lines along with 1/28 and 1/25 highs. As for the downside, the EUR/USD has our 1st tier uptrend line (off scree) serving as technical cushions along with previous January lows. Our 1st and 2nd tier uptrend lines could carry some weight since they run through April 2009 lows. That being said, a failure of our 1st tier could send a fairly negative signal considering April 2009 lows are around the 1.30.
Present Price: 1.3924
Resistances: 1.3964, 1.3992, 1.4030, 1.4051, 1.4100, 1.4135
Supports: 1.3902, 1.3876, 1.3850, 1.3822, 1.3796, 1.3756
Psychological: 1.40, January lows
Market Commentary provided by Fast Brokers.
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