The EURUSD has rallied all the way back up to a high of 1.3094 after marking a new 14-month low of 1.2522. However, it appears that the pair has encountered some resistance somewhere between the 1.3100 marker and the 61.8% Fibonacci retracement level of the most recent down-wave seen in its 4-hour chart. Since buying conditions are already at overbought levels as indicated by the stochastics, the pair could yet again slide. Revisiting its 14-month low or even lower is a possibility is if it does. On the other hand, it could reach the 1.3300 handle if it is able to bust out of the 1.3100 resistance.
On the economic front, Germany’s preliminary GDP growth during the first quarter of 2010 will be on deck tomorrow. The market is projecting a 0.0% growth in Germany’s economy during the period. Nevertheless, given the unexpected 2.4% drop in German retail sales last March, it is possible that the German economy even contracted during the first leg of the year. Note that consumption makes up about 56.7% of Germany’s total output. A weaker figure, therefore, could further add some selling pressure on the euro.