EUR/USD edges higher; strong resistance at 1.4025

The Euro continues to drift higher as equities and commodities remain in positive territory for a second day in a row.

Reports published by the Detastis showed German retail sales rise by 0.8%, below analysts estimates, but higher from the downwardly revised -1.7% prior.

With the U.S. ADP non-farm employment change and the ISM Non-manufacturing PMI due tomorrow, further Dollar weakness is expected to be limited.

Markets anticipate ADP at -30K from -84K, while ISM non-manufacturing to rise to 51.0 from 49.8.

Trend:

Weekly : Sideways
Daily: Bearish
Hourly: Bearish

Support & Resistance:

From current levels, 1.3955, the pair finds initial resistance at 1.3986, followed by 1.4025 and 1.4070.

Key support to watch is the 1.3920 where a break of such would open targets to the 1.3890 level, followed by 1.3850 and 1.3800.

Strategy:

Although there is strong resistance at 1.3990, the Euro may push a bit further before trending lower. For now, downward trend remains intact.

Limit Sell @ 1.4020 Targets: T1 1.4000 – T2 1.3805 Risk: 1.4070
* After 15 pips profit move stop to entry, take profit at will. Trade is canceled if it rebounds near entry and moves higher by 20 pips. Comments will follow if outlook changes.


Daily Fundamentals:


forexdistrict.com

By Juan P. Bejarano
Posted on February 2, 2010 12:19pm