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3 Apr 2014
EUR/USD finds support at 1.3700
FXStreet (Edinburgh) - The EUR/USD seems to have bottomed out around the 1.3700 handle on Thursday, following the dovish tone from Draghi’s presser.
EUR/USD testing 1.3700
The ECB left the monetary policy unchanged in its April meeting, with the refi rate unmoved at 0.25%. However, the Council scraped the toolbox and unanimously decided to use non-conventional measures if the situation so requires it, and among them some sort of quantitative easing. The sole mention of ‘QE’ was enough to spook investors, pushing spot to a brief test of sub-1.3700 levels. “In the short run, the market is likely to digest the talk of unanimous support for unconventional measures with relish and continue romancing the possibility of ECB QE. In time, we suspect the focus will shift back to the fact that the Council did not cut rates today and the fact that the Council is still unclear on what ECB QE would look like”, assessed Richard Barwell, Strategist at RBS.
EUR/USD relevant levels
The pair is now losing 0.42% at 1.3708 and a breakdown of 1.3694 (low Feb.28) would open the door to 1.3685 (daily cloud top) and finally 1.3467 (daily cloud base). On the upside, the initial hurdle aligns at 1.3820 (high Apr.2) ahead of 1.3827 (high Mar.26) and finally 1.3828 (21-d MA).
EUR/USD testing 1.3700
The ECB left the monetary policy unchanged in its April meeting, with the refi rate unmoved at 0.25%. However, the Council scraped the toolbox and unanimously decided to use non-conventional measures if the situation so requires it, and among them some sort of quantitative easing. The sole mention of ‘QE’ was enough to spook investors, pushing spot to a brief test of sub-1.3700 levels. “In the short run, the market is likely to digest the talk of unanimous support for unconventional measures with relish and continue romancing the possibility of ECB QE. In time, we suspect the focus will shift back to the fact that the Council did not cut rates today and the fact that the Council is still unclear on what ECB QE would look like”, assessed Richard Barwell, Strategist at RBS.
EUR/USD relevant levels
The pair is now losing 0.42% at 1.3708 and a breakdown of 1.3694 (low Feb.28) would open the door to 1.3685 (daily cloud top) and finally 1.3467 (daily cloud base). On the upside, the initial hurdle aligns at 1.3820 (high Apr.2) ahead of 1.3827 (high Mar.26) and finally 1.3828 (21-d MA).