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Forex: EUR/USD quietly edges higher during Asia session

FXstreet.com (Barcelona) - The EUR/USD finished the day up 11 pips at 1.3011. However, the pair at one point traded as low as 1.2955 after the German IFO number release which came in at 104.4 actual vs. 106.2 forecast. This was the second day in a row of disappointing economic data out of Europe after the German PMI came in below expectations the previous day. The pair is maintaining a firm bid during the Asia session, up another 29 pips at 1.3040.

According to Cristian Maggio, Senior Emerging Markets Strategist at TD Global Securities, “After yesterday’s Eurozone PMI data, we said that the ECB’s rate cut decision in May appeared to be down to the wire, and we looked to today’s German IFO to either confirm or contradict the weakness in yesterday’s German PMI today. But confirm it did, with the headline business climate dropping from 106.7 to 104.4 (mkt 106.2), current conditions from 109.9 to 107.2 (mkt 109.5), and expectations from 103.6 to 101.6 (mkt 103.0). So with France looking a touch better but still very weak into April, and German surveys heading lower again, we think that will be enough to get the ECB debating the potential for up to 50bps of cuts, but actually delivering a 25bps cut to the refi rate in May and leave the debate for further action until June.”

The daily chart is still displaying mixed signals, and a complete lack of trend in either direction over the past 2 weeks. Initial resistance comes in at 1.3052 (9dma), followed by 1.3130 and then 1.3200 (high price from April 16th). First support sits at 1.3005 (the 20dma), followed by 1.2940 (the 200 dma). The RSI (14) remains in neutral set up, still consolidating between the 40-60 level as momentum fails to break in either direction.

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