Daily Technical Analysis:
EUR/USD has not tested SMA5 yesterday. SMAs are now moving and contracting in bullish sequence, with market is moving between SMA5 and SMA15.
RSI is showing decreased bullish strength with 62% reading. RSI is now reverting back from uptrend in downward direction below resistance level (70%).
Upper, Middle and lower bands are moving upward with squeezing bands. It signals that market is decreasing bullish volatility. Market is moving between upper and middle band.
With Lutfi Magnet theory market is 85% bearish and with adjustments 60% bearish. Lutfi Magnet Theory and Adjustment are showing bearish sentiment.
On the basis of Technical Analysis initial bias remains bearish for further corrective moves. Market may attempt yesterday’s low at 1.2890 and then low at 1.2861. While on higher side it may follow consolidation to attempt high at SMA5 1.2970, break there may attempt high at weekly magnet 1.3005.
The euro rebounded against the dollar on Tuesday, erasing losses after bottoming out when surprisingly weak German business confidence sent investors selling the single currency in European and U.S. session.
The single currency dropped against the greenback in earlier sessions after the Ifo institute said its business climate index for Germany fell to its lowest level since March 2010, stoking concerns that the European debt crisis is fraying nerves in Europe’s largest economy.
The Ifo index fell to 101.4 in September from 102.3 in August, the fifth consecutive monthly decline and well below expectations for a 102.5 reading.
Ongoing uncertainty as to whether Spain will seek a bailout pushed the single currency down as well.
On Thursday Madrid will unveil a draft budget for next year and announce structural reforms, while the results of the country’s bank stress tests are due on Friday.
Elsewhere, the Moody’s ratings agency should wrap up a ratings review on Spain later this week.
Spain’s economy minister said the country would not rush to seek external financial aid, though press reports have said the country is quietly drawing up blueprints to formally seek assistance.
Uncertainty sent the euro falling though bottom fishing sent the currency back into positive territory in early Asian trading on Tuesday.
Here is schedule for today’s important data:
GfK German Consumer Climate at 11:00am. According to this survey of around 2000 consumers, the mood remains stable in Europe’s biggest economy. The index rose to 5.9 points last month, after seeing similar levels in previous months.
Mario Draghi talks at 6:00pm. The president of the ECB will speak in a conference in Berlin and could discuss the ECB’s bond buying program. The launch of the program already had a positive impact on markets, but this will not last without a Spanish aid request. One of his colleagues said that the ECB plans to use the program and not just use it as a bazooka. Draghi will likely relate to that
US CB Consumer Confidence at 07:00pm. US Consumer Confidence declined August to 60.6 from a revised65.4 in July in light of worries about the weakening job market. The reading was well below predictions forecasting an increase to 65.8. An increase to 63.2 is predicted now.
EUR/USD started the day at 1.2976. Euro attempted high at 1.2989 and with a downward move attempted low at 1.2890, but found support there and then went up to close day at 1.2929.