German Constitutional Court decided to refer the decision on the ECB's OMT program to the European Court of Justice

Not a good day for Europe, this Friday: first, the German Constitutional Court decided to refer the decision on the ECB's OMT program to the European Court of Justice, saying that there are substantial reasons to suggest the Outright Monetary Transaction (OMT) exceeded the ECB's mandate and thus infringes the powers of the Member States. Then German industrial output unexpectedly fell in December, pointing for a not that strong growth in the country as expected.

And to top it all, US employment readings missed expectations, printing a pretty poor 113K, above December 74K but well below the expected 180K. Initial market reaction was dollar bearish, and the EUR/USD managed to extend its advance to a fresh weekly high of 1.3642, albeit quickly retraced back to the 1.3600 level, consolidating nearby as the day looms. 

Week ends with the pair posting some mild gains, mostly thanks to Mr. Draghi and ECB’s optimistic economic outlook: deflation risk is well acknowledged but contained, and the Bank has at its disposable several available tools that will use if needed. But a closer look at the daily chart, will show the pair posted a lower low for the year around 1.3470, while to the upside the pair halted well fellow past week high of 1.3715; 20 SMA maintains a pretty bearish slope, and price holds below it, with indicators standing in neutral territory. All of this puts the pressure to the downside, at least from the technical point of view, but there’s not much of a confirmation right now: price needs to break below 1.3440 static support areas to extend its slide in the midterm, with 1.3550 now as immediate resistance. 

Sellers are still quite strong, first line around the 1.3610/30 area, and more around 1.3700, this last probable top for next week.