EURUSD: EUR trip to the South.. Fundamentals & Technicals Agree

USD: Higher US yields look set to force EUR/USD back down to 1.1800 again. The only bullish
argument we can see for EUR/USD this week is a case for strong 2Q US data being already
fully priced and traders wanting to jump in early on the EUR recovery story – more signs of
which should emerge through the quarter as, for example, vaccination programmes gain
pace in the likes of France and Germany. But with the EU Recovery Fund stuck in a German
courtroom, the EUR re-rating story may have to wait.

EUR: In terms of the local calendar, we’ll hear a couple of times from ECB President Lagarde as
well as seeing eurozone February retail sales and industrial production – plus the German
April ZEW investor survey. Elsewhere, the global chip shortage won’t be helping the
European auto industry either and we suspect EUR/USD needs more consolidation at these
lower levels, before making a move higher later in the quarter. Certainly, a sustained break
above the 1.1900 RESISTANCE area would be a surprise.

I will be look for a channel breakout to SELL..