Technical Analysis of EUR/USD
Despite the Greek bond swap being officially completed, the Euro didn’t seem to react to the news as traders had probably priced in the event with the EUR/USD trading down at 1.3133 this morning. During the European session we should expect limited activity within the tight range of 1.3100-1.3200 ahead of the FOMC rate decision. Considering the better than expected improvement in the US economy, the Fed is at the moment in a position where it needs to start to consider the possibility of an earlier reversal of monetary policy than had been anticipated. That said, today’s retail sales data due at 12.30 pm GMT become all the more interesting as any sign of strength out of the numbers could reaffirm the likelihood for a near-term shift in the outlook of the Fed. While fundamentals favour the greenback today, with the US Dollar Index spiking above the 80.00 level, the big picture for the Euro remains bleak. The Euro has been hovering around the 1.3200 area well supported on dips below 1.3100, the 23.6% Fibonacci level from August high to December’s low. The bearish line capping RSI I and the MACD crossing below the zero line on the hourly chart are further supporting short positions with target the next support level by 1.2669. In the alternative scenario, a break above 1.3200 could trigger the price up to 1.3374, the 38.2% Fibonacci level.
EURUSD Daily Chart
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