The EUR/USD is holding strong and consolidating above our 3rd tier uptrend line as the currency pair experiences a couple moderately-weighted inflection points. German PPI and the EU’s Current Account data came in well above analyst expectations. Hence, the positive string of data from the EU continues, supporting the EU’s steadfast monetary policy stance.

The combination of rising prices and increased demand for EU exports shows the EU’s economy is faring just fine right now, and the 1% benchmark rate seems justified. The EUR/USD’s uptrend is alive and well due to a combination of outperforming global econ data and the ECB’s hawkish stance towards monetary policy. However, we can’t say the same for the Cable. BoE Governor King’s dovish monetary approach is whacking the Pound again, making the Euro a desirable destination for risk-oriented traders. The EUR/GBP supports this observation as the currency pair catapults past .90.

Meanwhile, the EUR/USD could experience continual near-term resistance due to the historical consolidation between December 2008 and September 2008 highs. The currency pair will likely opt to build a new base unless we receive impressive economic news in the immediate-term. Considering Monday and Tuesday will be light on the data front, the next couple trading sessions provide a great opportunity for investors to lock-in some profits ahead of the important EU PMI data releases next Wednesday. The EUR/USD should take its cue from the S&P futures in the meantime, which isn’t necessary a bad thing since it’s difficult to find a reason to be fundamentally negative on U. S. equities right now.

We’ve readjusted our trend lines and still can’t form a downtrend line of substance. Hence, the EUR/USD still has quite a bit of upward mobility despite historical consolidation in this area along with the highly psychological 1.50 level. An eclipse of September 2008 highs would serve as yet another signal that the global economy is on the path to recovery. As for the downside, the EUR/USD has multiple uptrend lines as Wednesday lows to fall back on. The currency pair is separating itself from the psychological 1.45 level, another positive indicate for the EUR/USD trend-wise.

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