Euro failed to break through 1.2900 although the bounce was small and the Euro is feeling very heavy with the current uncertainty over next months ECB meeting stopping the improvement in risk appetite to translate into currency gains. EUR/JPY buying supported the pair to gain in New York to just below 128. EUR/GBP came under pressure again trading back to the low 0.88s. German ZEW current conditions fell to -91 vs. -89 previously although future expectations improved. Sterling rebounded with stocks supported by EUR/GBP selling and GBP/JPY buying. A lot of data is ahead of us this week including Q1 GDP which will be critical in the pounds short term direction. CPI (Mar) came in at 2.9% y/y as expected. Looking ahead, March Claimant Count forecast at 120k vs. 138k previously. Also Feb ILO Unemployment rate forecast at 6.7% vs. 6.5%.
Technical Outlook:
EURO R1: 1.3015 S1: 1.2860 R2: 1.3040 S2: 1.2840
Chart pattern hints towards the possibility of small upward correction for the day. With the trading range of 1.2880 -1.3000 levels for the day. Chart pattern shows a descending triangle pattern and is expected to test the support level .Currency is also trading on the lower bollingers but Stochastic and momentum are seen flat
GBP R1: 1.4700 S1: 1. 4520 R2: 1.4720 S2: 1. 4480
Chart pattern gives bearish signals for the day. Trading range is expected between 1.4530-1.4690 levels for the day. RSI and stochastic are seen trending down .Momentum is also supporting the view .Currency is trading below the moving averages
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