After looking heavy through Europe as a result of the ongoing concerns of a Greek default, the Euro turned around sharply when stories began to circulate that the Greek Government had reshuffled the team involved in the negotiation with the international creditors, with the role of the finance minister, Varoufakis, being reduced after being criticized by EU officials last week. His role will be taken by the Foreign Minister, Euclid Tsakalotos.Having looked heavy, in dipping to a low of 1.0818, the rebound has been sharp, with the Euro briefly taking out the Fibo resistance at 1.0911 (76.4% of 1.1034 /1.0461) in making a new trend high of 1.0925. If this level can be regained, as the dailies suggest is likely, then the next targets will see the Euro head on towards 1.0954 (7 Apr high) and then to the 1.1034 pivot, above which would put any thoughts of an immediate return to the downtrend on hold. A dovish outlook from the Fed on Wednesday could well be the catalyst to put the dollar under further pressure and send the Euro higher.
On the downside, minor support lies at 1.0850, ahead of the stronger Fibo support at 1.0830 (23.6% of 1.0520/10.925) and the session low of 1.0818. Below 1.0800, which currently looks a bit unlikely would head towards the 38.2% Fibo level at 1.0772 and the 50% pivot of the rally, at 1.0720.
The choppy conditions are not making it easy to be a swing trader right now, so short term positions, looking to take quick profits are the order of the day. Look for 1.0825/1.0925 as a guide today.
Economic data highlights will include:
Case Schiller House Price Index, Consumer Confidence, Richmond Fed Mfg Index.
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