Morning Futures Roundup

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Lack of Consensus Keeps Euro Range-Bound

   Fundamentals
After rising for the first two months of the year, the Euro has been flat over the past month, as currency traders try to sort out the mess in Europe. The intermediate term direction of the currency has been a hotly debated topic. Those analysts who expect a drop in exchange rates cite the shaky economic footing the Eurozone is on, especially in light of the fact that more countries face austerity measures, which could result in the entire EU slipping into negative growth. The buying of Eurozone bonds in the early part of the year was driven by institutions that were reestablishing positions, suggesting that support from bond buyers may be going away. Those with a favorable outlook for the Euro cite Fed policy as a potential supporting factor for the currency. It is unlikely the Fed will raise interest rates anytime soon, especially during an election year. This could result in some traders looking to the Euro to take advantage of slightly higher yields on debt. The one thing both sides appear to agree on is the fact that the risk remains to the downside.

   Technical Notes
Turning to the chart, we see the June Euro chart has been trading sideways since the end of February, with the range tightening. It looks as though the market would have to break through the 1.3500 mark on the upside to continue the uptrend started in the early part of the year. On the downside, the 1.3000 level can be seen as support. Failure to hold there could result in prices coming down to test relative lows below the 1.2700 mark. Both momentum and RSI are currently flat, giving no hint of future market direction.

   
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