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EUR/USD Analysis: Bulls Unwilling to Compromise

EU data encouraging, but speculative interest unimpressed. Market's mood remains positive although caution prevails.
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FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market and was founded in 2000. The website offers a wide range of tools and resources: 24/5 currency news, real-time economic calendar, advanced rates and charts, educational webinars, analysis reports, forecasts, Learning Center, newsletters, industry services, FX customizable studies… As its distinctive trademark, the portal has always been proud of its unyielding compromise to provide neutral and unbiased information and to enable its users to take better and more confident decisions. FXStreet has managed to gain the collaboration of the entire Forex industry, from individual professionals and small companies right up to Forex Brokers and Investment Banks. FXStreet covers the FX Market 24/5: an expert team of journalists, traders and economists picture what the market is doing and what is happening as it happens. Besides the main website in English, the portal is available in 16 other languages (English, Japanese, Simplified Chinese, Traditional Chinese, Spanish, Russian, Arabic, Turkish, Indonesian, Portuguese, German, French, Italian, Hungarian and Vietnamese, Korean and Catalan). FXStreet was short listed as “Best e-FX initiative of the year (vendor)” for the FX Week e-FX Awards 2010.

EUR/USD Current price: 1.1306

  • EU data encouraging, but speculative interest unimpressed.
  • Market’s mood remains positive although caution prevails.

The EUR/USD pair peaked for the day at 1.1323 but is once again battling with the 1.1300 figure, with most major pairs still stuck to familiar ranges. There is a wait-and-see stance from speculative interest ahead of Thursday’s first-tier data, and Easter Holidays that see investors moving away from their trading desks. Data coming from Europe failed to impress bulls despite beating expectations, as February Trade Balance printed a surplus of €19.5 billion seasonally adjusted, largely above the market’s expectations. Also, core monthly March inflation in the EU came in at 1.0%, surpassing the 0.3% expected, although unchanged at 0.8% when compared to a year earlier.

The US released Mortage Bankers Association data showing mortgage applications fell by 3.5% in the week ended April 12, and the February Trade Balance, with the deficit shrinking to $49.4 billion. February Wholesale Inventories rose 0.2%, less than expected, while St. Louis Federal Reserve President James Bullard said that economic data should improve in the coming months.

The pair continues trading between the 38.2% and the 50% retracements of the 1.1447 and 1.1183 decline, with spikes beyond the levels being quickly reversed. The 4-hour chart shows that the pair recovered to trade above all of its moving averages, with the 20 SMA at around 1.1300 and advancing above the larger ones, but technical indicators have lost upward strength after entering positive territory, indicating that bulls still hold the grip, but are unwilling to compromise for the time being.

Support levels: 1.1280 1.1245 1.1200

Resistance levels: 1.1320 1.1350 1.1385