Weak Economic Reports Trigger Surge in Euro

Weaker than expected U.S. economic reportstriggered a surge in the EUR USD, taking out Monday’s closing price reversaltop and a major 50% retracement level at 1.3510.

Weaker than expected U.S. economic reportstriggered a surge in the EUR USD, taking out Monday’s closing price reversaltop and a major 50% retracement level at 1.3510.

The news that the U.S. economy weakened overshadowed concernsabout sovereign debt issues in Spainand Ireland.This remains the only factor that could exert a bearish influence on theEuro. As long as the U.S. economyremains weak, the greater the chance the Fed will use quantitative easing to tryto prevent the economy from derailing. QE puts more liquidity into the economythereby weakening the Dollar.

Technically, if the Euro can sustain itselfabove the 50% level at 1.3510, then look for the rally to continue to theFibonacci level at 1.3816.