The beginning of the week, the dollar, which once again strengthened against the euro. Led to the first market test 1.0566 support first and then saw a low of 1.0520 (1.05 support). All the time thorn in the side for the markets is the position of Greece in the negotiations, which rejects further austerity and the continuation of reforms. It seems that Greece will weigh on the single currency until the common positions between Greece and the EU.
Economic Calendar: Tuesday: 9:00 EUR CPI in Spain 9:00 EUR HICP in Spain 10:00 EUR CPI in Italy 11:00 EUR Industrial Production 14:00 US FOMC member speaks, Kocherlakota 14:30 USA Core PPI 14:30 USA Retail Sales Base 14:30 USA PPI 14:30 USA Retail
From a technical point of view, the currency pair is strongly sold out, which should lead to a slowdown in the downward momentum. Accordingly, there should be a test March low of 1.0456 and slightly exceeded then we can expect a correction. (As stated in its report CFTC number of short positions on the EUR / USD pair dropped last week, which may be the signal for a short-term change in the trend. In this case, you should take into account that a minimum level of this year will not be broken out of the box and will be defended the demand side). It must be remembered that this is not a clear signal and within a week the situation can be dynamically changed. Forecast for Tuesday:
Tomorrow we have a number of important data from the Euro zone, however, the most important data will flow from the US. In the case of very good data from the United States, must reckon with a strong appreciation of the dollar, because any good data will bring us closer to an increase in interest rates as early as mid-year (June). Similarly, you should take into account the strength of the Euro if the data turn out to be weak. In the case of the weakening of the euro must reckon with the test today's bottom at 1.0520. The next support levels are 1.05 and 1.0456 (this year at least). Weak data from the US, will lead to growth and should be here pretty soon see the resistance level of 1.0620. The next resistance levels are 1.0643 and 1.07.
Note: The currency pair is under pressure and on Wednesday we will know the position of the ECB. Mario Draghi will summarize the QE program. Due to the very large amount of data which will be announced tomorrow, it's hard to predict at present a clear direction for couples discussed. Personally, I think that the data from the US will be better or in line with market consensus and the dollar will strengthen.