In my view it already priced a possible ECB rate hike at 1.40 area, and than the pair went down probably on the fact that the energy prices were off from the high of the previous week, making the usd looking stronger than the Euro.
Last Friday main news was the Japanese quake and tsunami, also if the Euro went up on a renewed talk on rate hike.
For next week we should follow really close the evolution on the unrest in Libya and the japanese consequence on the world economy.
The consequesenque on what is happening in Libya will have an impact on the european GDP and so really soon we will see European economic stats deteriorating;
On the other side the consequences of what happened in japan should have an immediate effects on the costs of the energy, but that will not be limited to Europe only but to the all world.
In both cases we may see the inflation going up and so that will increse the probability of an imminent rate hike from ECB.
We are in a really tricky situation.
Here are some resistance and support to whatch for the next week:
| R4 1.4759; R3 1.4472; R2 1.4185; R1 1.4043; S1 1.3756; S2 1.3611; S3 1.3324; S4 1.3037. |
It seems clear that next week we may see some volatility. the first target for the pair will be the 1.4040 area, but I see really unlike the possibility to test 1.4185 already next week, while in case of a bearish movement to 1.3756 I see possible a test to 1.3611 area.
Happy trading to all.
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