The pair closed in NY Wednesday at 1.3159. The initial catalyst which seemed to help push the pair higher was the German Industrial Production (MoM) release which came in at 1.2% actual vs. -0.1% forecast. According to analysts, “In Europe, a solid German industrial production release has boosted the EUR. Not significantly though, as the very well established range that has held since early April remains firmly intact. EUR focus remains on the evolving ECB message, which as we heard last week remains open to another rate cut. They have not signaled any balance sheet expanding programs, however, which overall could leave the EUR well supported.” The German data also seemed to give a boost to both commodities and equities, with oil notching its’ highest close since late March and the S&P 500 closing at a new all time high of 1632.59. The recent behavior of the EUR/USD is beyond confusing as it appears to follow risk assets some days and others have no correlation to outside markets at all. Although it must be noted, both the EUR does continue to outperform the commodity currencies such as the AUD and NZD. Although the German data has been better than expected the past two days, some analysts caution about getting to optimistic. Remember, it was just last week when the Euro sank a full cent after ECB President Mario Draghi mentioned the possibility of negative interest rates on deposits. Since then, we have heard other ECB members speak both for and against the idea. From a technical perspective, the pair back above the 100-DMA after bouncing from support around the 21-DMA, now further support at $1.3084. Daily studies slowly rising but yesterday met resistance around daily Bollinger top and Feb 1 res line, now initial res at $1.3197/98, just above yesterday’s high at $1.3194. Break above here would extend recent gains with bulls eyeing the 61.8% level at $1.3342. However, failure at here sees bears retest the 21-DMA.
