EUR/USD for Thursday, February 6, 2014
The Euro has done well in the few days to recover by moving off the support level around 1.35 and rally higher back towards 1.3550 which has allowed it some time to consolidate and catch its breath after its strong falls last week. To finish out last week the Euro continued its decline and moved to a two month low touching below the support level at 1.35. The next obvious support level below is 1.34. For the last month or so 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 a few 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.
Retail sales in the eurozone fell sharply over the Christmas period, with their biggest monthly fall in two-and-a-half years. December's sales fell by 1% compared to the same time a year ago, and by 1.6% compared to November. Both figures were much worse than analysts expected. The drop in consumer demand followed a surprise fall in eurozone inflation to 0.7% in January. The figure prompted concerns about deflation in the 17-nation bloc. According to the European Union statistics agency, Eurostat, the largest annual decrease in sales came in Germany, where trade fell by 2.4% in December compared to the same month in 2012. Overall, sales of food, drink and tobacco fell by 1.6% on an annual basis, while trade in non-food items dropped by 0.4%.
EUR/USD Daily chart " title="EUR/USD Daily chart " height="242" width="474"> 
EUR/USD 4 hourly chart" title="EUR/USD 4 hourly chart" height="233" width="474">
EUR/USD February 5 at 21:35 GMT 1.3535 H:1.3555 L: 1.3498
EUR/USD Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 1.3500 | 1.3400 | --- | 1.3700 | 1.3800 | --- |
During the early hours of the Asian trading session on Thursday, the Euro is trying to continue its rally back towards the 1.3550 level. Current range: just below 1.3550 around 1.3535.
Further levels in both directions:
• Below: 1.3500 and 1.3400.
• Above: 1.3700 and 1.3800.
OANDA’s Open Position Ratios
EUR/USD Open Position Ratios" title="EUR/USD Open Position Ratios" height="27" width="474">
(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 40% as the Euro has dropped sharply back below 1.3550. The trader sentiment remains in favour of short positions.
Economic Releases
- 00:30 AU Retail Sales (Q4)
- 00:30 AU Retail trade (Dec)
- 00:30 AU Trade Balance (Dec)
- 12:00 UK BoE MPC - APF Total (Feb)
- 12:00 UK BoE MPC - Base Rate (Feb)
- 12:45 EU ECB - Interest Rate (Feb)
- 13:30 CA Merchandise Trade (Dec)
- 13:30 EU ECB President Draghi gives press conference following interest rate announcement
- 13:30 US Initial Claims (01/02/2014)
- 13:30 US Non Farm Productivity (Prelim.) (Q4)
- 13:30 US Trade Balance (Dec)
- 13:30 US Unit Labour Costs (Prelim.) (Q4)
- 15:00 CA Ivey PMI (Jan)