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EUR / USD Trading Outlook

Friday 4th May

EUR/USD was under further pressure this morning as Euro zone composite and services PMI came out worse than expected and with negative outlooks at 46.7 and 46.9 respectively. The pair dropped from 1.3150 down to 1.3125. The market now anticipates the all important NFP figure at 13:30 BST this afternoon. The pivot point is 1.3175 and there is a preference to follow the trend and sell from here. The initial support lies at 1.3120/1.3100. In the bigger picture, the day candle chart reveals a strong support at 1.3000 (Feb 16th, March 15th and April 16th 2012).

Thursday 3rd May

EUR/USD came to a 1.3120 low in yesterday’s session and since has been trading in a tight range from 1.3130 to 1.3160. Downside pressure still remains on the pair and the technical indicators have a preference to sell from 1.3175 with 1.3125 eyed as the initial support. Trading floors are seeing demand with bids from 1.3120/1.3100 however if stops below the big figure are triggered this could spark a move lower. The Spanish bond auction this morning has little affect on pricing.At 12:45 BST Mario Draghi will give a press conference. The market will be listening closely to the ECB presidents comments for signs of how the central bank are preparing for further economic storms across the Euro zone, the financial forecast is suggesting hurricane season is on the horizon. The question is are the ECB prepared to offer further easing? If so the euro is likely to weaken as a result.

Wednesday 2nd May

EUR/USD has had a clear break to the downside of 1.3200 and currently trades at 1.3140. The move lower came as poor data from Germany was announced; unemployment change has reached 19,000 and the PMI figure for manufacturing is 46.2, which implies a negative outlook. Eurozone manufacturing PMI was also lower at 45.9 and the Italian unemployment rate has ticked up to 9.8% from 9.6% last. Flows are suggesting there is some demand between 1.31/40/30 which has cushioned the fall for now and there is more demand between 1.3110/00. Offers to sell are now seen placed at 1.3180. 

Tuesday 1st May

EUR/USD is pointing down from 1.3275 highs and currently trades around 1.3247. The break through 1.3250 this morning has opened the way to the overnight low at 1.3234. Past this the next critical level is 1.3205/10 where there is a preference to buy with initial profit target eyed at 1.3280. There is no Euro news on the calendar but the market are awaiting key events later this week including the ECB meeting on Thursday and the NFP on Friday.

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