EUR/USD April 22 – Steady to Start Week as Cautious

EUR/USD has picked up where it ended last week, trading quietly in the mid-1.30 range. There are only two economic releases to kick off the new trading week. The Eurozone will release Consumer Confidence, while the US publishes Existing Home Sales, a key release. The markets will be looking for some good news after a long streak of weak US data.

Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.

EUR/USD Technical

• Asian session: Euro/dollar edged higher, touching a high of 1.3084, before consolidating at 1.3052. The pair is unchanged in the European session.
• Current range: 1.3000 to 1.3050.

Further levels in both directions: 

<img alt=”EUR USD Daily Forecast April 19″ src=”https://forexcrunch-wpengine.netdna-ssl.com/wp-content/uploads/2013/04/EUR-USD-Daily-Forecast-April-191-350×196.png” width=”350″ height=”196″ /> 

<img alt=”EUR USD Daily Forecast April 18″ src=”https://forexcrunch-wpengine.netdna-ssl.com/wp-content/uploads/2013/04/EUR-USD-Daily-Forecast-April-18-350×196.png” width=”350″ height=”196″ />
<img alt=”EUR USD Daily Forecast April 17″ src=”https://forexcrunch-wpengine.netdna-ssl.com/wp-content/uploads/2013/04/EUR-USD-Daily-Forecast-April-17-350×196.png” width=”350″ height=”196″ />
<img alt=”EUR USD Daily Forecast April 16″ src=”https://forexcrunch-wpengine.netdna-ssl.com/wp-content/uploads/2013/04/EUR-USD-Daily-Forecast-April-16-350×196.png” width=”350″ height=”196″ />
<img alt=”EUR USD Daily Forecast April 15″ src=”https://forexcrunch-wpengine.netdna-ssl.com/wp-content/uploads/2013/04/EUR-USD-Daily-Forecast-April-15-350×196.png” width=”350″ height=”196″ />
<img alt=”EUR USD Daily Forecast April 11″ src=”https://forexcrunch-wpengine.netdna-ssl.com/wp-content/uploads/2013/04/EUR-USD-Daily-Forecast-April-112-350×196.png” width=”350″ height=”196″ />
<img alt=”EUR USD Daily Forecast April 11″ src=”https://forexcrunch-wpengine.netdna-ssl.com/wp-content/uploads/2013/04/EUR-USD-Daily-Forecast-April-111-350×196.png” width=”350″ height=”196″ />
<img alt=”EUR USD Daily Forecast April 10″ src=”https://forexcrunch-wpengine.netdna-ssl.com/wp-content/uploads/2013/04/EUR-USD-Daily-Forecast-April-10-350×196.png” width=”350″ height=”196″ />

• Below: 1.30, 1.2960, 1.2880, 1.2805, 1.2750 and 1.27.
• Above: 1.3050, 1.31, 1.3140, 1.3170, 1.3255, 1.3290, 1.3350 and 1.34.
• On the upside, the pair is testing 1.3050. 1.31 is stronger.
• 1.3000 is providing support. This is followed by 1.2960.

Euro steady in mid-1.30 range – click on the graph to enlarge.

EUR/USD Fundamentals

• 12:30 US FOMC Member William Dudley Speaks
• 14:00 Eurozone Consumer Confidence. Exp. -24
• 14:00 US Existing Home Sales. Exp. 5.02M

For more events and lines, see the EUR/USD

EUR/USD Sentiment

• US numbers continue to point downward: What’s wrong with the US? The country’s economic releases continue to disappoint the markets, as this week’s key releases fell below expectations. Thursday brought more bad news, as employment and manufacturing numbers missed the mark. Unemployment Claims came in at 352 thousand, higher than the estimate of 349 thousand. The Philly Fed Manufacturing Index dropped from 2.0 points to 1.3 points, nowhere near the estimate of 2.7 points. The alarm bells may not have gone off just yet, but the continuing weak numbers are raising concerns about the extent of the US recovery.
• Italy’s president reelected: There were dramatic developments in Italy over the weekend. President Giorgio Napolitano, who was supposed to be replaced, was reelected to a new 7 year term. As well, the leader of the center-left PD party, Pier Luigi Bersani, resigned. Napolitano will be tasked with trying to break the logjam and shepherd the parties put a coalition together. If he fails, the country may have to again go to the polls. Fresh elections would mean more uncertainty and would weigh on the euro.
• G20 Meeting Goes Soft on Japan: There was little surprise that the G20 did not take Japan to task over its monetary policies, which have resulted in the yen taking a tumble. Although Japan has faced a lot of criticism leveled against Japan, the G20 issued a very soft statement about monetary easing which didn’t even mention Japan. So, we can expect the yen to continue to weaken and this will impact on EUR/USD.
• IMF pessimistic about Eurozone: Last week, the IMF released its World Economic Outlook on global growth, and had bad news for the Eurozone. The report found that the Eurozone is the weakest part of the global economy, and forecast contraction in GDP this year for Italy, France and Spain. The report downgraded German growth from 0.9% in January to 0.6%. The IMF urged the ECB to lower interest rates in order to stimulate the stagnant Eurozone economy. Chief Economist Olivier Blanchard did not mince words about the dire situation in Europe, stating that “the slump in the Eurozone is worrisome”.

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