After sliding over 100 pips throughout the day, the EUR/USD managed to halt its decline at the 1.3280 zone and trimmed intraday losses, as risk sentiment improved and US stocks turned positive during the American afternoon. The EUR/USD finished the week above the 1.3300 level, 65 pips down on the day and just 30 pips below weekly opening price.
Is the EUR/USD developing a doble top? "The figure has its neckline around this week low 1.3256, that converges with the 38.2% retracement of its latest daily run," comments FXstreet.com chief analyst Valeria Bednarik. "While price is 100 pips away from the level, a break below it will point for a 150 pips run lower, targeting then, the 1.3100 area. In the short term, increasing bearish pressure will surge if the pair losses 1.3320, towards mentioned 1.3250/60 price zone."
Ealier on the day, the unexpected fall in US consumer sentiment and earnings below expectations in Intel Corp. (INTC) are weighting on sentiment. The greenback, measured by the US Dollar Index, is well into the positive ground, although retracing from early tops in the proximities of 80.30.
The US stocks market closed Friday mixing S&P 500 and Dow great numbers but Nasdaq posting loses. the DJIA and the S&P has turned higher in the last hour of the session to close at its highest number since December 10th, 2007. All three major averages turned in their third-straight weekly gain.
The crisis is over
On currencies again, The technical failure at 1.3400 has sent EUR/USD back below the 1.3300 psychological level and opened the way for a retest of the 1.3250 area, which represents this week lows and the neckline of a double top formed by Jan 14/18 highs.
With a weekly close above the 1.3300 level, "and a push above 1.3350 refocuses on 1.34", said Fan Yang, analyst at FXTimes. "A break above 1.3405 should revive the bullish outlook that has been the bias at least since Nov. 2012, with the 2012 high of 1.3485 in sight".
Ulrich Leuchtmann, analyst at Commerzbank comments that most sectors of the market share the same positive underlying sentiment to that which has long characterized the FX market, 'the crisis is over'.
"This reduces the event risks for FX", he explains. "Even though the euro is unable to benefit from that alone, a creeping USD weakness will probably continue to support EUR-USD".
On the other side, Nomura Strategist Saeed Amen has taken a look at EUR/USD from a purely technical perspective.Looking at a daily chart, Amen notes that spot is up on the week but regardless, he has flipped to a bearish view. He notes that spot repeatedly tried to break 1.3400 and to close above the upper Bollinger band. However, combined with those failures, a downward tick in RSI (14) is suggestive that a short term high is likely to have been reached.
In this line, "failing to once again advance past 1.3400, EURUSD has turned and moved lower towards 1.3300 support," points FXstreet.com analyst Richard Lee. "A further decline through the figure would prompt an extension towards 1.3165 support in the near term."
Experts, Banks & Independants' Forecast Poll expects the EUR/USD at the higher range of 1.33. Forecasted average for next week, the Euro against the US Dollar is in the higher range of 1.3300 with weekly and monthly targets around 1.3360.
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