The Euro closed the North American trading session for the week at 1.2035. It had spent much of the previous 24 hours trading in a narrow range between 1.1960 and 1.1980 and as the housing data was released it was trading at 1.1975. A rise of 40 pips or so was immediate, and over the next couple of hours settled into a range between 1.2020 and 1.2045, just below the previous range of 1.2055 and 1.2075. We would need a trade above 1.2095 to push traders into looking for 1.2208 to create a double top of the last few days. Euro bulls would then be looking for 1.2320, the currency high on 23rd January. On the downside, forex traders would be looking for a close below 1.1950 to confirm a test of the 26 February low of 1.1825. A breach of that would then have fx traders looking for a new low for 2006 below 1.1775.
The British Pound was subject to similar price action against the US Dollar. Cable closed the day at 1.7430 after spending much of the pre-statistic day around 1.7350. A trade above 1.7450 would have day traders looking for a 55 pip rise to take GBP/USD to the high of 22 March, on the way to testing the months high of 1.7625. A close above this level could lead to a two cent rise, looking to test 1.7810. On the downside, a close below 1.7325 could lead to a test of the 2006 low of 1.7225. Support would then be expected at 1.7185.