The single currency could get over 1.33 versus the greenback again with improving of the market sentiment after it has come under pressure yesterday on increasing worries about the Euro zone economic slow down which open the way for taking further easing steps by ECB for reviving the economy which is negatively impacted by EU governmental efforts for underpinning its revenues by hiking taxes and cutting its spending for having a stabilized financial situation in the face of the debt crisis risks which are still looming threating its creditability.
Yesterday, Mar EU Manufacturing PMI has come at 47.7 as expected and as the preliminary reading of it from 49 in February and also Feb EU Unemployment rate has come at 10.8% as expected from 10.7% in January but by the end of last week we have seen EU CPI flash reading of March coming at 2.6% y/y while it was expected to ease further to 2.5% from 2.7% in Feb and Jan which is well above the ECB 2% inflation target showing that there is still inflation upside risks as the ECB president Draghi has maintained recently because of the rising of the energy prices despite the economic slow down in the Euro zone.
God willing, the pair can face now resistance at 1.3384 which could stand in the face of it last week and breaking it can open the way for 1.3489 again whereas it has formed its recent top which dragged the pair to 1.3003 and in the case of breaking 1.3489 the pair can meet other resisting levels at 1.3546, 1.3613, 1.3808 before 1.387 which has not been broken since the end of last October and after several tries to break it in last November while getting back down from here can face supporting level at 1.3251 which could cap the pair falling supporting it to get over 1.33 again and in the case of breaking it, this can open the door for testing other supporting levels at 1.3133, 1.3048, 1.3003, 1.2973. 1.2930, 1.2874 before 1.2631 which has been the pair formed bottom on 13th of last January.
Kind Regards
FX Market Strategist
Walid Salah El Din
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