Overnight the EURUSD bounced off the 100 hour MA at the 1.3618 ( the low reached 1.3621). The level also corresponds to the 38.2% retracement of the low to high range that has prevailed over the last 3 weeks  which adds to the significance.  The key level on the topside remains at 1.3691. A break above this level should solicit additional buying interest.  Conversely, a move back below the 1.3621 should solicit selling interest. 

Looking at the 5 minute chart the bias is also positive with the price above the 100 and 200 bar MA at the 1.3649 and 1.3645 levels respectively.   IF the price can stay above  these levels intraday the bias would remain positive.

The market continues to be contained in the three week (plus) range, but  the longer it goes on, the closer we get to a break out. Longer term the price on daily chart has tested the bottom 4 times and each time it has bounced.  A 38.2% correction off these lows still targets the 1.3852-73 area. This would be a modest correction for the pair.   Finding support at the 100 hour MA keeps the spirit of that move alive today. Confirmation would come with a break of the 1.3691 level.  The high for the last three weeks at 1.3735 would be the next hurdle of course, but it is surmountable. 

Imports fall on oil and automobiles (-1.7%) Exports fall -0.3% as well. 

Initial Clams come in at 462K . As expected.

Canda Capacity Utilization is stronger at 70.9 while the Trade Surplus is higher at 0.8Billon C$.  House prices rise 0.4% as expected.

The SNB will announce their interest rate decision at 8:00 AM. The expectation is for unchanged rates. What will be of interest is if they change the wording on the value of the Swiss Franc.  Will they keep the wording the same at “it would prevent an ‘excessive’ rise in the franc” . The EURCHF is down at 1.4600 level – testing the SNB to address the currency in the comments.  The EURCHF had been using 1.4630 as the floor previously.  If they keep the language look for a further bias to the downside for EURCHF and possibly USDCHF.  The central bank is concerned about too strong a currency being deflationary but if global growth is rebounding,  it may be ok at this moment.  If they keep the language, look for 1.4630 to cap the topside for the EURCHF. The bottom will be explored to see how low it can go.

At 8:30 the US Trade Deficit will be released. The expectation is for a $41.0 billion gap versus $40.2B last month.  The Trade Deficit has been getting larger again. This is a drain on GDP growth (the inflation adjusted Trade Balance is the one that is used for GDP).   A larger deficit should lead to a weaker dollar.

Also at 8:30 will be the weekly Unemployment Claims. The expectations for Claims is for a slight fall to 460 K from 469 K.  Continuing Claims are expected to come in at 4500K unchanged from last week.   The employment picture has stabilized from an Initial Claims standpoint over the last month or so. Some suggest it may be weather related.  If so, we should start to see the thaw soon.

Canada will release their Trade Balance with a 0.2B surplus expected after a -0.2B deficit last month.  They also release Capacity Utilization which is expected to rise to 70.0% from 67.5%.  The New Housing Price index is expected to show a 0.4% rise, the same as last months rise.