Clearly there is indecision among the bulls to buy further around 1.40 area. The energy complex this morning is trading down on the day and that should support the Dollar against the Euro. Later we have the industrial production m/m for Europe, which is seen up 0.4%, 0.1% higher than the previous one.
On the Libya front Qaddafi if strong and is winning against the "rebels"; if that will happened there will be a negative impact on European GDP which is the biggest oil importer from Libya. Would not be really aggressive if I say that the pair should be bearish in the medium term due to Libya.
Technically we are trading in the upper section of the Bollinger bands and we are approaching the medium band; I see the possibility for another test to 1.4000, or in case of hesitation a drop to 1.3860 will be probabilistic, and from there it may point down to the first support around 1.3800 area.
Here are some resistance and supports:
| R4 1.4344; R3 1.4181; R2 1.4018; R1 1.3959; S1 1.3796; S2 1.3692; S3 1.3529; S4 1.3366. |
I would try to build a short position from here up to 1.4000 with a stop at 1.4040 and try to point down to 1.3860 or lower to 1.3796 which is the first support;
Note that Weber speaks around 1 pm London time...it is usually bullish for the euro, so be careful around that time.
Happy trading to all
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