Dollar falls against all major after disappointing data.

US Consumer Confidence printed 75.0 against the forecast of a fall to 82.0, Which Triggered a rally In All the Majors.

With EUR/USD finally hits the elusive 1.5000 level, and AUD/USD back above 0.9300.
PPI m/m printed 1.0% above expectations of 0.4%, And Core PPI printed 0.4% above expectations of 0.2%.

A drop in Consumer Confidence, which indicates a Slow Growth in the Economy, together with Above expectations PPI which means a Higher Inflation sign, only complicates matter for FOMC in terms of their Interest Rate Decision Making.

Forget Recession, US Economy is entering a Stagflation Economy. It will be interesting to see what move FOMC will take. Will they ease The interest rate again to boost growth, like what most People are assuming right now. Or hold rates as it is to deter any possible rise in inflation?

EUR/USD Outlook

Data from Euro zone yesterday, is good with German IFO report above expectations, and Trichet’s comments on Euro Zone interest rates help boost confidence back into EURO.We are expecting German Consumer Confidence and Import Price Index today. While not usually important, considering the weakness in the dollar right now, any Large Deviation would probably trigger a move up for the EUR/USD.

Also Today with Durable Goods orders and New Home Sales Data coming out from the US and expected to print a lower number than previous month. A stronger Euro would be expected tonight.

As of Writing this report, EUR/USD has just fall below the elusive 1.5000 level, and would probably move lower during Asian Session as a correctional move to relief the overbought levels.

Technically EURO is Heavily Overbought, any move up today would have to be maintained by Fundamentals.
EUR/USD is currently in conflict technically and Fundamentally. Fundamental Bias is still to the upside, but technical wise, a correction has to occur, in order for Price to reclaim and maintain above the 1.5000 level.

Possibility of this happening during the US session is High provided a correctional move occurs during the Asian Session.

 

Resistance Levels

1.5049 — February 26th Historical High

1.5103 — R1 Daily

1.5210 — R2 Daily

Support Levels

1.4940 — Daily Pivot

1.4833 — S1 Daily

1.4670 — S2 Daily