EUR/USD: Upside potential up to 1.3135
In a surprising move the EUR/USD kick started the week on a strong positive footing despite Moody’s having downgraded the ESM bailout program on Friday. In a flurry of buying the bulls pushed the market above 1.30 where it is currently hovering. The risk appetite that seems to have built up in the past 24 hours is likely to continue today. With the EUR/USD trading in a bullish channel since last Wednesday, the technical set up favours further the bullish outlook. With the market hovering below October’s highs an upside penetration of 1.311 would open the door for 1.3135, which will be a critical resistance level for the bulls to watch. As long as support level at 1.3015 remains intact, the market is likely to be well supported. Should the bears break below 1.3015, we could see the market re-testing 1.298. On the economic data front a smattering of economic data comes in the form of EU Producer Price Index during European hours and US Redbook later in the evening.
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