2013.01.08: The support levels still have strength
EUR/USD
During yesterday�s trading session, the pair had another clash with the support created at 1.3020 and so far it looks like we are not going to see price moving below this level. The European Sentix investor Confidence was announced at -7.0, much better than the expected -13.7 and although it is not a high impact indicator, it helped the Euro in its upward path.
Technical Outlook
We maintain our bearish bias on the pair and we consider that this move up lacks the power to break any strong resistance levels. A good place for the sellers to take back control of the market is the resistance created at 1.3170, seen on the four hour chart above. On the downside, the support at 1.3020 remains crucial and a possible break will probably generate more seller pressure and consequently, lower prices.
Fundamental Outlook
Today no high impact economic indicators are released for either the Euro or the US Dollar. The only scheduled releases worth mentioning are the Euro zone Retail Sales, coming out at 10:00 am GMT, with an increase expected (0.5% from a previous of -1.2%) and the Euro zone Unemployment Rate, coming out at the same time, with a very small increase anticipated: 11.8% from 11.7%. For the retail Sales, higher numbers are likely to strengthen the currency and the opposite applies for the Unemployment Rate.
GBP/USD
The two pairs have been highly correlated during the last period so the movement of the GBP/USD was quite similar yesterday to the one of the EUR/USD, making another attempt at breaking the support before retracing higher.
Technical Outlook
It seems like price is headed into resistance again and a good place to see if the move up really has some power is at the resistance zone of 1.6130 � 1.6140. If that zone is surpassed, the next hurdle will be 1.6175. On the down side, 1.6040 remains extremely important for future direction and a valid break would be indicative of down trend resumption.
Fundamental Outlook
The UK doesn�t release any economic indicators today that could affect the pair and neither do the United States. It appears that today�s movement will be driven by the technical aspect of the market.
Written by: Bogdan Giulvezan
The article above is based on the writer�s 4 year experience and it does not constitute trading advice or investment recommendations, just a personal opinion and view on the market.