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Are the bulls ready to assault the 1.3500 frontier? Following a brief period of consolidation, the EUR/USD is trading back at 13-month highs at 1.3495, where the pair seems to be ready to break above the so-called 1.3500 level.

"The same people who called $1.30 a 'big barrier' are saying the same thing about $1.35," points out Citi Index's chief global strategist, Ashraf Laidi, on Twitter. "Not to mention 1.32, 1.33 and 1.34... all were 'big barriers' among creative musings."

In the short term, the EUR/USD would face immediate resistances at 1.3495/1.3500 (daily high/psychological level), 1.3530 and then 1.3550 (high December 2, 2011). On the downside, supports could be found at 1.3415 (intraday lows), 1.3370 (10-day MA) and 1.3350 (low January 25).

On a bigger chart, the single currency is resuming its 1.3500 siege, with the pair currently trading at 1.3495, 0.28% positive on the day. "Upside penetration of the figure will open scope for an extension higher towards medium-term resistance via the 1.3809," states FXstreet.com analyst Richard Lee.

Earlier in the session, U.S. economic data was released mixed, showing a disappointing U.S. consumer confidence, but housing prices stabilizing. "Given the comparative directions in today's reports, it's likely that speculation will continue to side with further monetary stimulus by the Federal Reserve," states Richard Lee. "The notion should prompt further U.S. dollar selling in the short term, particularly against the euro."

However, a mild risk-off tone prevails in markets, as investors refrain from taking big positions ahead of the FOMC decision and the NFP report on Friday.

Will Europhoria Be Back?

With the euro printing fresh 13-month highs, the shared currency has taken another step higher and broken above it 2012 peak to reach its highest level since December 2011 at 1.3495. However, the EUR/USD remains stuck below the 1.3502 resistance.

Above the 1.3500 frontier, Richard Lee sees a new bullish movement to 1.3809, the same as Citi Index's Ashraf Laidi wrote at the beginning of December. Lately, Goldman Sachs revised its EUR/USD target up for 3 and 6 months from 1.2500 to 1.4000 -- a big change. And the UBS 1-month target is now at 1.37.

It seems the market is confident about the EUR/USD bullish trend. But what about if EUR/USD falls below 1.3400? "The signal works in conjunction with the aforementioned resistance barrier at 1.3502, and could prompt a decline to initial support circa 1.3382," adds Lee. "Further penetration lower would purport a downward move towards 1.3282."

"The euro is lower against the crosses, but there appears to be some scope for further gains against the dollar in the near term," says Jason Ball, FX Analyst at Wells Fargo Bank. Meanwhile, Valeria Bednarik, chief analyst at FXstreet.com, notes that the midterm bullish trend remains quite firm and 1.3540 seems now possible.

The Big Day, Part 1

Moving forward to Wednesday, the euro docket will kick in with a gauge of European consumer and industrial confidence and the Spanish GDP. UK mortgage approvals, consumer credit and the M4 money supply will also capture investors' attention.

Across the Atlantic, ADP will give the first hint of Friday's U.S. NFP and unemployment report, and all eyes will be on the FOMC's upcoming decision on policies.

- Fed Interest Rate Decision (Jan 30 19:15 GMT)
- U.S. Nonfarm Payrolls (Feb 01 13:30 GMT)
- U.S. Gross Domestic Product Annualized (Jan 30 13:30 GMT )
- German Consumer Price Index (Jan 31 13:00 GMT)

Source: Forex: EUR/USD Closes The Siege Around 1.3500 - Now What?