Euro keeping the 1.30/1.31 range

FXstreet.com (Barcelona) - The shared currency is advancing for the second consecutive week so far, albeit giving away earlier gains on Friday as risk aversion and a logic profit taking sentiment are prevailing amongst investors. The generally softer tone from the consumer prices in both core and peripheral members was noticeable during the European morning, adding to the selling interest in EUR/USD.

… EcoFin a non-event

The EcoFin meeting will kick in today in Dublin although market participants have practically ruled out any impact on the FX markets, despite Cyprus being one of the main topics to be discussed. In addition, Ireland, Spain and Portugal would be in the agenda as well, mainly regarding the role of the ESM in the recapitalization of banks.

Ahead in the day however, the US docket is posed to bring in the fireworks, as retail sales would confirm whether consumers have extended their spending spree in March. Consumer sentiment would be put to the test as well, gauged by the University of Michigan index, with all the above preceding Chairman Bernanke’s speech in the European late afternoon.

Maybe markets are kind of anticipating a USD-friendly results and speech by Chief Bernanke, using them as an excuse to trade in a softer tone today, partially trimming recent strong gains. Furthermore, it seems the neutral-to-downside bias would prevail in the very near term and over the weekend, ahead of a more appealing calendar in the upcoming week.

In the technical realm, the 1.3115/20 area (38.2% Fibonacci retracement of the February-April slide) would be the initial hurdle. Further bullish impulse would target 1.3138/40, where converge the weekly highs and the 55-day moving average, en route to 1.3150 (100-day moving average) and then 1.3231 (50% Fib. retracement).
On the downside, the first relevant support sits at the psychological mark at 1.3000 ahead of the key 200-day moving average at 1.2900/10.