Monday, 21 Feb 2011

FOREX: EUR/USD Testing 1.37 Resistance Line, Failing to Breach

The EUR dipped versus the US dollar in today's morning hours, but has so far appeared to regain its losses as a string of positive data out of the euro zone drove consumer confidence higher. This boost has given impetus for a higher euro versus its counterparts in today's European session.

With US markets absent from today's markets, however, thin trading and high volatility are expected for the upcoming sessions. The EUR/USD appears to be testing the 1.3700 resistance line and so far shows weakness as it approaches that mark.

Technical traders appear to be dominating today's market as there is a strong presence of profit-taking around key levels reached this morning. The 1.3700 price mark on the EUR/USD is one such level that appears to have undergone an intense selling period upon peaking this morning during early Asian trading hours.

The EUR appears stabilized after this morning's bullish manufacturing and services data. Whether or not these figures will support the euro through the remainder of the day is yet to be seen. In such a thin trading environment, profit-taking appears to be the accepted norm. Traders may wish to anticipate downswings after any upticks, however mild.