Euro and pound surged higher on wave of optimism-feb 04.

Euro surged higher as a wave of optimism overcame the market with European shares rallying 2% and risk appetite improving. EUR/JPY gained 3% and the Euro reclaimed the 1.3000 level. December PPI dropped 1.3% vs. -1.1% forecast. German Retail Sales dropped -0.2% in December. Looking ahead for December Euro zone Retail Sales forecast to drop -0.3% vs. 0.6% forecast. Sterling fell in Asia but the market was buoyant and cable rallied of the 1.42 level at the New York open. Helping sentiment was a rebound in the Construction PMI off record lows to 34.5 vs. 28.8.

Technical Outlook:

EURO R1: 1.3130 S1:1.2920
R2: 1.3150 S2:1.2890
chart pattern hints sideways to bear note . Trading range for the day is expected between 1.2930-1.3110 levels for the day. Momentum is seen trending down giving a small downside correction. Stochastic is seen flat and parabolic is supporting the bear note but caution required as it is seen trading above the moving average .

GBP R1: 1.4550 S1: 1. 4250
R2: 1.4580 S2: 1. 4230
chart pattern shows a bull trend for the day. Trading range is expected between 1.4270-1.4530 levels for the day. Momentum is seen trending down giving a small downside correction. Stochastic is seen flat and parabolic is supporting the bear note currency required is seen trading on the moving average break of which would confirm the bear note.