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[QUOTE="katetrades, post: 41723, member: 21862"] [b]EUR/USD Testing Downtrend Line at 1.3100 (March 8, 2013)[/b] The falling trend line on EUR/USD is still intact for now as the pair is currently testing the 1.3100 major psychological level. That area is in line with the 38.2% Fibonacci retracement level, which might act as resistance today. There are no major economic releases from the euro zone today but the ECB Governor Mario did talk about downside risks to growth during the central bank’s recent monetary policy decision. The ECB did keep rates on hold though and didn’t announce any changes to its current stimulus programs, and this allowed EUR/USD to bounce back to 1.3100 later on. However, 1.3100 might be the line in the sand for the euro’s rallies in the near term as the sentiment in the region is still downbeat. After all, there is a lot of political uncertainty in Italy at the moment and this places the country’s debt situation in jeopardy. In a nutshell, the ECB rate statement was slightly more upbeat than expected as Draghi focused on the potential economic rebound that the central bank is projecting to happen later in the year. This could continue to provide support for the euro today. However, the main event risk for this pair is the U.S. non-farm payrolls report due 1:30 pm GMT. The labor report could show a 162K increase in hiring for February, which could keep the jobless rate steady at 7.9%. [IMG]http://www.tradersway.com/var/tw/storage/images/media/images/080313/14259-1-eng-US/080313.jpg[/IMG] A stronger than expected figure could give the U.S. dollar a boost as the Fed is closely watching the jobs figures as part of their consideration in withdrawing monetary stimulus. A weaker than expected figure could trigger a U.S. dollar selloff and push EUR/USD above 1.3100 and the trend line as this would mean the U.S. economy might have trouble withstanding the future job cuts entailed by sequestration. If you’re expecting the downtrend to continue until the end of the week, shorting at 1.3100 with a 50-pip stop and aiming for the 1.3000 handle would be a 2:1 trade. But if you’re expecting an upside breakout, wait for a bit of momentum around 1.3125 with a stop below the 1.3100 mark. [I]By Kate Curtis from Trader's Way[/I] [/QUOTE]
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