Week In FX Europe - EUR Waits For Helicopter Ben

Includes: EWU, FXE, FXF, GLD, UDN, UUP
by: Dean Popplewell

It's all about the Fed. The crying has stopped, while the bleeding has slowed somewhat, ahead of the FOMC meet next week. The EUR's recent price action continues to beat the bears despite its own soft euro-data. On Friday, the "mighty" dollar has ended up aiding the 17-member single currency even further, pushing it to finish the week in technical bullish territory.

The Reuters/University of Michigan consumer sentiment for June came in below expectations, and applied temporary weekending pressure on the dollar. With so many licking this week's asset price destruction wounds, very few investors had any interest to ply their wares after Friday morning's data releases. Instead they seemed much happier to move to the sidelines and wait for Ben's press conference next Wednesday.

The EUR has managed to hold, for a second consecutive day, just above the accelerated trend support of 1.3300. According to technical analysts, it's hoping to stage a clear break above resistance at 1.3342 -- the 61.8% retracement and late February high. If achieved, this would leave the immediate risks marginally higher and possibly push through the optioned protected next big figure -- 1.3400. Any momentum forcing the EUR below 1.3310, for a period of time, will open the door for the currency to test Wednesday's low at 1.3279.