EUR/USD Holds Above 1.30 After US Q1 GDP data

by Admin

Awards 2013

EUR/USD 1H chart 4/26/2013 9:33AM EDT

EURUSD

GDP: The advanced reading for US Q1 GDP was 2.5%, which was an improvement over the 0.4% in Q4 2012, but missed economists’ forecasts of around 3.0%. The USD weakened across the board.

1.30; rising trendline: The EUR/USD fell overnight and was pressing the 1.30 handle, reaching down to 1.2990. This is also a rising trendline that goes back to the 1.2744 April low. It found support here just ahead of the GDP data, and rallied to 1.3035 in the 30 minutes after the release.

Anticipating the ECB risk event and break from flat market: The bounce holds the bullish structure established in April. It appears that the technical support factors are holding so far, but bullish outlook is also limited because of the rate cut expectation for next week’s ECB meeting. A rally above 1.31 next week especially after the ECB risk even has passed can revive a bullish outlook, at least toward the 1.32 April high. The market is flat as it tests the rising trendline noted before, so we will need to see it break below this week’s 1.2954 low (which also pushes below 50% retracement) in order to revive the bearish outlook, which would open up the 1.2744 low, though we should also monitor 1.29-1.2919 (61.8% retracement) for near-term support.