Uninspired currency traders spent this Monday squaring positions ahead of the event of the week, the ECB. The fact that the US banks were closed on holidays helped to keep majors subdued. With no fundamental data to give leads, news focused for the most on the European Central Bank, not speculating whether or not the Central Bank will launch QE this week, but how much it will be. Market talks these days suggest something between €500B and €750B in the form of sovereign bond purchases, although post SNB latest reaction, the figures extend up to €1T in some cases. Greece elections next Sunday are surely receiving attention too, as the opposition party Syriza is largely expected to win. For this Tuesday, German PPI and ZEW survey will insure some action early Europe, being the last barometers of the European heath.
From a technical point of view, the EUR/USD posted a limited recovery daily basis, stalling below the 1.1650 mark. In the short term, the 1 hour chart presents a mild positive tone, as per indicators aiming higher above their midlines and the price developing above its 20 SMA, although lacking real strength. In the 4 hours chart indicators continue correcting higher from oversold levels but far below their midlines, while 20 SMA caps the upside now around 1.1630 acting as immediate short term resistance. A recovery above the level should see the pair extending its recovery up to 1.1730 probable top for this Tuesday if somehow the bullish momentum accelerates.
Support levels: 1.1580 1.1545 1.1510
Resistance levels: 1.1640 1.1680 1.1730
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