By: Tradehits.com
The EURUSD fell sharp last week, reaching the 1.3624 support level after failing to breach the 1.3810 resistance level. After 5 weeks of gain, the pair finally lost ground. A reaction to the FED's announcement of QE tapering 10$ billion. The tighter monetary results in a stronger dollar. In the Eurozone, the business survey and better than expected German PMI couldnot stop the Greenback rally. With Christmas this week we shouldn't expect too much in volume and announcements.
On Tuesday, the US will release the "New Home Sales", which is a leading indicator of economic health because these sales trigger a wide-reaching ripple effect.
On Thursday the unemployment claims will be released in the US.
On a technical note, the pair was trading on a bullish trend since November. The 1.3600 level has provided a strong support thus far, but it may not continue too longer. The technical indicators show a change in the direction and 2014 may start with a bearish trend. The new economic year is likely to be affected by two major parameters: monetary policy and general risk trends. As the ECB is contemplating a stimulus expansion, it may switch position with the USD.
Support and Resistance Levels:
Resistance 1: 1.3715
Resistance 2: 1.3800
Support 1: 1.3620
Support 2: 1.3590
This analysis was provided by TradeHits.