EUR/USD Subdued Trading Below 1.1400 Handle
pair's attempted recovery from lower level now seems to face difficulty
in building momentum beyond 1.1400 handle despite of
better-than-expected German factory orders and Sentix investor
Date released on Monday showed, factory orders in Germany rose 1.9% in March as compared to a decline of 0.8% in the previous month and expectations of an increase of 0.6%. Moreover, investor’s Confidence in the Euro region, tracked by the Sentix index, also surpassed consensus expectations by printing 6.2 vs. 6.1 initially projected.
The pair had a muted reaction to the data points as ECB Vice-President Vitor Constancio remained concerned over the regions low headline inflation. Even the down-slide was limited as Federal Reserve board member Evans reaffirmed Fed's wait and watch stance on concerns over outlook for inflation.
The pair has maintained its moves within a 45-50-pips narrow trading range between 1.1375 and 1.1420 and only a follow through movement beyond the current trading range would provide fresh trading opportunities.
Technical levels to watch
Below 1.1375 (lower end of day's trading range), the pair is likely to find immediate support near 1.1355-50 confluence region. This 1.1355-50 area comprises of 20-day SMA and 23.6% Fibonacci retracement level of 1.0522-1.1616 up-swing and hence, a follow through selling is required to confirm a near-term break-down for the pair. A clear break through this immediate strong support seems to drag the pair immediately below 1.1300 handle, towards 1.1295-90 support region.
Meanwhile on the upside, only a sustained move back above 1.1400 handle, leading to a momentum above day's peak of 1.1420 level, would now assist the pair to build on to some recovery towards its 1.1465 horizontal resistance, which if cleared should further assist the pair to surpass 1.1500 handle and head towards testing its next major resistance near 1.1535-40 region.