EUR/USD
The euro zone inflation hit its lowest level since November 2009 in March, a shocking drop that raised expectations the European Central Bank will take radical action to stop the threat of deflation in the currency bloc.The inflation data trend in the euro zone over the past few years has suggested that the euro zone is walking towards the path of the lost decade of Japan. The euro zone is trending towards a spiraling deflationary environment such as that of Japan's despite its previous attempt to money-print to a certain extent. On the other hand, the US dollar pulled back from a 1-month high level due to weak jobs data printed Friday. Traders eye Wednesday's important event, FOMC meeting minutes.
Technical view-
For long run perspective, the pair is in a long trend up move for targets at 1.44 levels. The fresh target will be possible only once the pair closes above the 1.3967 level. On the down side, below 1.3673, the pair will fall to 1.3560 and 1.3450-1.3477 in the short term.
Weekly basis - April 07-11
On a weekly basis, the level between 1.3677-1.3673 is the crucial level. Once the pair breaks and closes below the 1.3677 level, the pair will fall to 1.3560 this week or next one. In the short term, the pair has been in a down trend from 1.396 levels and the pair broke the 9-month ascending trend line. In Asia, the pair is trading below the broken trend line. It is trading below the short-term moving averages. The bearish view still keeps moving in the daily chart.
On the down side, the pair has its support at 1.3643, 1.3585, 1.3562, and 1.3550 (200EMA). On the up side, the pair is facing strong resistance at 1.3735 (50SMA). Until the pair closes above the 50SMA, sell flavor gives a good money. In Friday's trading session, the pair took the support at the 23.6 fib level. Today's trading pattern will give a clue for coming short-term trading strategy. We recommended selling at 1.38 levels with sl 1.396 on March 20, 2014. The level between 1.3666-1.3643 is an open target, but it met 1.3673 Friday, just 9 pips away from our target. The RSI is still favoring sell side. On the up side, once the pair closes a day above the 1.3735 (50SMA) level, it will pull back to 1.3760, 1.3772, and 1.3820 levels.
Intraday-
In the H4 chart, the pair is facing resistance at 1.3734 (21EMA). For 2-day trading perspective, we expect the pair to pull up to 1.376-1.377 levels immediately and 1.3810 later. The hourly momentum indicators are giving a buy signal. It's a complete buy at current levels or its a value buy if any dip comes between 1.3666-1.364.
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