As always we will look at technical analysis first and then fundamental analysis.
Lets start with reviewing EURUSD technical analysis from 5th Apr and 23rd Mar. We anticipated a breakout to the upside towards 1.45 which came true in due course. Chart below shows before and after screenshots.
Lets analyze the current Daily chart, we can see that price came back down to re-test the breakout of Weekly Trendline. Right now it is resting on Daily Trendline, price is most likely price to bounce from here towards the upper daily trendline 1.4375 and may be even higher perhaps back to 1.45
If price starts to move lower then wait for it close below the Weekly and Daily Trendline and then look for short until 1.38
What’s keeping the EUR bears alive is the speculation that Greece would be forced to restructure its debt. So far this year EUR has gained strength on the basis that ECB will increase interest rates to curb the growing inflation in eurozone. We have already seen ECB increase interest rate earlier and more rises are likely to come in future, but overall debt worries from other countries in European union is denting the confidence.
US economy is not looking that great either. S&P yesterday revised their rating outlook from neutral to negative. This week we have existing home sales numbers from US due out as well, keep an eye on this news item.
Look for longs until 1.4375 and 1.45. If price manages to break and close below 1.42 then look for shorts until 1.38