After recently falling sharply through the key 1.37 level and reaching a two week low in the process, the euro finished out last week surging higher to above 1.38 and a new high for 2014. It has however been quickly rejected at that level and been forced back down below 1.38 and is presently heading back towards 1.37 in the face of selling pressure from anything near 1.38. Throughout the first half of February the euro enjoyed a solid move higher moving from support around 1.35 up to test the key level at 1.37. It was able to move through the 1.37 level before consolidating and spending the best part of the last couple of weeks resting on support at that level. To finish out January the euro continued its decline and moved to a two month low touching below the support level at 1.35.
For the last couple of months the euro has generally steadied and established a trading range roughly between 1.3550 and the recent resistance level at 1.38, however to finish out several weeks ago the euro broke down through the support level at 1.3550. The 1.3550 level has become a key level over recent times and a couple of weeks ago the euro sprung off it to a two week high at the resistance level at 1.37 where it has spent several days consolidating before dropping sharply back to the key 1.3550 level again. After placing some pressure on the resistance level at 1.38 several weeks ago, the euro has since fallen sharply down to its lowest level in two months. Through November the euro enjoyed a solid move higher which saw it return to a wall of resistance at 1.38 and in doing so move to a then six week high. In the few days afterwards the euro challenged the 1.38 resistance level again before being turned away yet again. In mid November the euro did well to bounce strongly off support at 1.34 and recover the lost ground from the previous couple of days which saw it fall from the resistance level around 1.3550. This was after a few weeks which saw it move steadily higher from a support level at 1.33 back up to a three week high just above 1.3550. Over the last few months 1.3550 has been a key level.
Towards the end of October the euro enjoyed a strong surge higher to move through to its highest level in nearly two years just above 1.38 before spending that week content to consolidate around this level. Over the following three weeks it fell heavily down to a support level at 1.33 before recovering well. It moved quite well throughout the middle of October after breaking higher from its sideways range. For the month leading up to that, the euro traded within a narrow range between 1.3450 and 1.3650 before the range narrowed down to between 1.35 and 1.36. The former level of 1.35 was strongly tested a few weeks ago and has resurfaced as a significant level presently.
Germany needs to take a leadership position in negotiating an economic solution to the rapidly escalating standoff on the Crimean peninsula, said Jim O'Neill, a former Goldman Sachs asset management chairman and expert on emerging economies. Heavily dependent on Russian gas for energy, Germany has the closest trade relationship with Russia among Western leaders, O'Neill said Monday during an interview on CNBC's "Squawk on the Street." That gives it the most to lose if its allies decide to pursue economic sanctions against Russia, O'Neill said. "Economic sanctions are really only going to work if the countries that get hurt the most themselves stick to them," O'Neill said. Fears over the global imbroglio caused by Russian troops seizing control of Ukraine's Crimean peninsula last week sent stocks into a tailspin across global financial markets on Monday. If Germany can not only sign on to an economic package designed to end the standoff, but also play a large role in its development, that would give O'Neill "a little more comfort" about geopolitical tensions, he said.
EUR/USD Daily Chart" title="EUR/USD Daily Chart" width="474" height="236"> 
EUR/USD 4 Hourly Chart" title="EUR/USD 4 Hourly Chart" width="474" height="238">
EUR/USD March 4 at 21:20 GMT 1.3735 H:1.3782 L: 1.3725
EUR/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.3700 | 1.3500 | 1.3400 | 1.3800 | --- | --- |
During the early hours of the Asian trading session on Wednesday, the euro is trading within a narrow range roughly between 1.3730 and 1.3740 after remaining between 1.37 and 1.38 for the last day or so. Current range: just above 1.37 around 1.3730.
Further levels in both directions:
• Below: 1.3700, 1.3500 and 1.3400.
• Above: 1.3800.
OANDA’s Open Position Ratios
(Shows the ratio of long vs. short positions held for the EUR/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The EUR/USD long position ratio has moved back above 20% as the euro has fallen away from the resistance level at 1.38. The trader sentiment remains heavily in favour of short positions.
Economic Releases
- 00:30 AU GDP (Q4)
- 08:58 EU Composite PMI (Feb)
- 08:58 EU Services PMI (Feb)
- 09:28 UK CIPS/Markit Services PMI (Feb)
- 10:00 EU GDP (2nd Est.) (Q4)
- 10:00 EU GDP (2ndEst.) (Q4)
- 10:00 EU Retail Trade (Jan)
- 13:15 US ADP Employment Survey (Feb)
- 15:00 CA BoC - Overnight Rate (Mar)
- 15:00 US ISM Non-Manufacturing (Feb)
- 19:00 US US Federal Reserve releases Beige Book Report