The euro advanced 0.5% against the USD at Tuesday’s session. Spain joined the recovering countries in the eurozone after Germany and France. The near-term outlook for the eurozone’s economy has clearly improved.
Spanish unemployment – Registered unemployment level fell to 118 923 people in April, the historical biggest drop. In seasonally adjusted terms, unemployment decreased by 50,160 people, the best figure recorded in April.
Upcoming events:Traders eye Spanish and Italy services PMI. French and Germany final services PMI are due today. At last, euro area retail sales and final services are also released today. On the US front, there are some major events in the economic calendar. Today’s trade depends on how the USD behaves. We expect Spanish and Italian services will be on the positive side. French and Germany data may be disappointing or in a neutral stance. The euro retail sales data can be flat or a further decline.
Technical view: The pair paused a 2-day losing streak and made 0.5% gains at yesterday’s session. The pair managed to hold the support at 1.1050 (previously acted as resistance) and changed the direction. Today ahead of major data, the euro is trading lower against USD at the Asian session. The pair has major resistance at 1.1265 100Dsma and 1.1300 100Dema. Until the pair closes below these levels, technically bearish views remain in play. The pair made a double top at 1.1225. The pair has been rejected from 1.1225 for four days in a row. 20Wsma seems at 1.1200, at yesterday’s session the pair was unable to close above it. Today it is unable to breach 20Wsma. The charts clearly show the weakness is adding further. A minor upmove is expected above 1.1225, 1.1265, 1.1275, and 1.1290. A strong upmove will ignite in case the price closes above 1.1300 towards 1.1390 and 1.1475. Due to the divergences between the US Fed and ECB policies, the longer-term outlook for the pair favors bears. The recent uptrend of this pair has happened because the USD is weakening further.
Intraday:Support is found at 1.1170 and 1.1150. Resistance seems at 1.1200 and 1.1225. We recommend risk buying above 1.1200, safe buying could be above 1.1230 for intraday targets at 1.1270, 1.1290, and 1.1330. In the latter case we can expect 1.1390 and 1.1430.Traders, please keep in mind 1.1225 and 1.1300 are acting as strong resistance. Both the given levels are on closing basis. The weekly trend favors bears. To breach this trend, bulls first needs to close above 1.1225, later 1.1300. In these cases, 1.1390, 1.1435, and 1.1475 are not ruled out. On the bearish front, we recommend selling below 1.1150 with targets at 1.1125, 1.1100, 1.1080, and 1.1060
Trade: Risky traders could buy above 1.1200, safe traders could buy above 1.1230.
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