March 20th, 2012, 03:28 PM #1
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EUR/USD Climbs As Eurozone Worries Ease
EUR/USD had a bullish day after New York Federal Reserve President William Dudley’s comments fueled worries about the health of the U.S. economy. He said “The U.S. economy still faces significant headwinds and there are some meaningful downside risks. It is far too soon to conclude that we are out of the woods in terms of generating a strong, sustainable recovery.”. Even though there has been no significant improvement in the eurozone, 1.30 support remained intact lately. EUR/USD daily charts suggest that the pair will remain bullish as long as the pair trades above 1.3200. If the pair holds above 1.3210, which is the daily moving average (100), it is possible to see another attempt towards 1.3400 level. If price does rally and resume heading north, look for resistance at 1.3290 and 1.3330. If the pair reverses at 1.3240, which is 38.2 fibonacci level, support will be seen at 1.3200, 1.3160 and 1.3110.
GBP/USD has been doing its best to sustain these extreme overbought levels. The U.K. has the third highest deficit in the G-7 but the market remains optimistic as the country will not ease austerity in its budget. I expect to see some retracement and touch 1.5850/30 before the bulls try to push the pair higher. If the pair can move above 1.5880, it would head to previous month’s high at 1.5990. If prices turn bearish from here, look for support at 1.5830, 1.5800 and 1.5770.
AUD/USD has been pulling back lately, but the previous week it found support at the 38.2% Fibonacci retrace level. The pair has been overly bullish for several months now, and it appears that the pair completed a sell-off since 29 February. As a result, the pullbacks are probably going to attract buyers going forward. Worries about the Chinese economy is slowing may put pressure on AUD though. Resistance levels to watch will be 1.0665, 1.0705 and 1.0800 with support levels at 1.0550, 1.0510 and 1.0420.
This pair has been looking for a direction for weeks. The upside is protected by the parity level and the Canadian dollar normally gains from higher oil prices so it is hard to buy this pair at the moment. On the way down there will be support at 0.9850, 0.9790 and 0.9705. Resistance levels are located at 0.9905, 1.0000 and 1.0050.
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