EUR/USD: Daily Technical Analysis for May 7, 2014

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The EUR/USD rallied and made decent gains in today’s trading session after reports show improvement in the Euro economy. European Union’s statistical arm, reported that retail sales rose 0.3% in March, defying expectations for a 0.2% contraction. Retail sales in February were revised down to a 0.1% gain from a previously estimated 0.4% increase.

This sparked for demand for the euro currency as did upbeat Spanish jobless numbers.

Official data released earlier revealed that the number of unemployed people in Spain dropped by 111,600 in April, compared to expectations for a decline of 49,100, after a 16,600 fall the previous month.

Also the Markit Economics research group said that Spain’s services purchasing managers’ index rose to a six-year high of 56.5 last month, from a reading of 54.0 in March. Analysts had expected the index to tick up to 54.4 in April.

Meanwhile in the U.S., data revealed that the country’s trade deficit narrowed to $40.38 billion in March from $41.87 billion in February, whose figure was revised from a previously estimated deficit of $42.30 billion. Analysts had expected the trade deficit to narrow to $40.30 billion in March, and the lackluster data softened the dollar.

Intraday bias in the pair remains on the upside as a fresh cross of 21 and 55EMA’s shows a buying signal on the 1hour charts. MACD and RSI also show a sign of bullish continuation but Stochastic seems to be signaling a minor retracement in the pair.

The pair was able to make resistance at 1.39496 before seeing a mild pull back. A clear break of 1.39651 resistance will resume the bullish trend in the pair and more demand to 1.40211 is expected.

 

 

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