Euro Continues to Shine

Coming Up Today (all times GMT) EUR German Flash Manufacturing PMI (8:30) EUR Flash Manufacturing & Services PMI (9:00) For the second week in a row, the Euro led the way among major currencies. The strength occurred even as traders were trimming riskier assets, as seen by the slump in commodity and equity prices last week. The trading action appears to illustrate that Forex traders are becoming more comfortable with the EU’s economic situation and believe that the EURUSD is undervalued. With little news expected today, Forex traders are awaiting the US FOMC Meeting and UK MPC Minutes on Wednesday, which could trigger the next big move in the market.  EURUSD After finally trading above its long term resistance of 1.3450, buyers have become more aggressive in the EURUSD as seen by last week’s move in the pair to a high of 1.3640. With the EURUSD trading around 1.3600 this morning, Forex traders are watching last Friday’s high to see if momentum continues. If the pair manages to close the day above 1.3640, it could signal further gains towards the pair’s next major resistance level of 1.3780. However, with Ireland’s coalition in disarray, the EURUSD may need to see positive fundamental news occurring for its technical strength to continue unabated. Support/Resistance 1.3500/1.3640 GBPUSD After a huge drop last Thursday, the GBPUSD rebounded to close the week around the 1.6000 figure. Nonetheless, last week’s late selling pressure revealed that the pair is vulnerable to broad based risk selling. As such, the GBPUSD could see heavy resistance above 1.6025, as Forex traders sell into each rally. Support/Resistance 1.5870/1.6055