DowntownForex

EUR/USD Key Support at 1.4170

By Forex District -The pair is higher but still trades in a tight range as traders are unwilling to take decisive measures as earnings continue to be delivered. EuroZone economic releases were quite positve signaling stabilization is under way. The German Ifo business climate came in at 87.3, higher than the 86.6 expected and the 85.9 reading in June.

Meanwhile, the EuroZone’s flash manufacturing and services PMIs reported an increase to 46.0 and 45.6 in July, respectively. In Germany, the manufacturing PMI rose to 45.2, while in France the manufacturing PMI rose to 47.9. German services PMI increased to 48.4, while in France teh data reported below June’s reading to 45.5.

The news is somewhat encouraging as it suggests the worst of the recession may be over, however the data remains below the level of 50 which indicates contraction.

Looking at the 4hour chart, EUR/USD briefly surpassed the 1.4170 level (50.0% Fib.), on a news reaction, but was able to hold support as risk appetite remains fairly stable. Next key resistance 1.4245, which is testing at the moment, is fairly strong where the pair could pullback. A break above this level will open subsequent targets at 1.4290, followed by 1.4330 and 1.447. The bias is neutral in the near term following the strong economic releases and the markets mixed bias.

The next level of support is the 1.4170, followed by 1.4080 and 1.4012.

Trading levels in play:

There are no solid trade recommendations at the moment for intraday moves.

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