EUR/USD edging towards resistance at 1.3000 (Barcelona) - The EUR/USD is drifting higher during the Asia session, up 20 pips at 1.2959 and sitting just below key resistance located at 1.3000. It will be another busy economic session out of Europe, with a some key EU Confidence reports being released later in the day.

According to analysts at Rabobank, “the suite of eurozone confidence indicators, compiled and published by the European Commission, offer a timely insight to the economy; they refer to May. Amongst the range of indicators we focus on Economic Confidence as the best summary figure for the overall economy. This is expected to tick higher to 89.4 from April’s 88.6. If realized, this will see the index a bit below 1Q 2013’s average level of 90.1 but higher than the average for the second half of 2012 of 87.1. As such, it will repeat the point made above about Germany’s economy for the broader eurozone. The economy is stumbling along rather than showing a strong trend either way.”

From a pattern perspective, the pair appears to be forming a ‘pennant’ continuation pattern which has upper boundary resistance near the 1.3000 area, as well as lower boundary support near the 1.2860 area. A close above or below either of these levels would most likely lead to a sharp move (apx 230 pips measured move) in the direction of break out.

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