EUR/USD Technical Analysis 4 January 2011

On Monday the Euro/Dollar decreased significantly with over 140 pips, but in the afternoon recovered. The European currency depreciated first down to 1.3249, from where it started rising up to 1.3395 yesterday, matching the positive Interbank sentiment projection at almost +8%, closing the day at 1.3358. This morning the pair is trading quietly and without clear direction for now. On the 1 hour chart trading is within wide range, while on the 3 hour chart the downward channel is still on hold. Break above the nearest resistance and yesterday's top at 1.3395 may trigger further recovery of the Euro. Going bellow yesterday's bottom and first support at 1.3249, however, would confirm continuation of the bearish trend, towards next objective downwards 1.3140. Today's focus is on France Consumer confidence, Germany Unemployment, Italy CPI and HICP and EU16 Harmonized CPI, at 7:45, 8:55, 9:30 and 10 GMT respectively. Quotes are moving just in line with the 20 and above the 50 EMA on the 1 hour chart, indicating short term neutral and medium term bullish pressure. The value of the RSI indicator is negative and declining, MACD is positive and quiet, while CCI is in line with the 100 line on the 1 hour chart, giving overall neutral to light short signals.