EUR/USD Headed for 1.15

EUR/USD Headed for 1.15

EUR/USD Headed for 1.15

EUR/USD came within a few pips of its 2016 high thanks to better than expected Eurozone data and a weaker dollar. Eurozone business and industrial confidence improved in the month of March but most importantly consumer prices rose 0.8% this month in Germany, which was double the previous month and higher than expected. Prices are beginning to rise, a sign that the ECB’s efforts could finally be paying off. Whether new year to date highs are made will now hinge on tomorrow’s German retail sales and unemployment report along with Friday’s non-farm payrolls report. We believe most of these releases, especially the European ones should be positive for euro, contributing to a rise towards 1.15. Yellen has been telling the market that they are slowing down shortly after Draghi said they are done with lowering rates so a further adjustment in EUR/USD could be necessary.

Technically, today’s rally has taken EUR/USD above the 23.6% Fibonacci retracement of the 2014 to 2015 decline. This leaves the February high of 1.1376 as resistance. If this level is broken, there’s no stopping the pair until 1.15. There’s a cup and handle pattern forming in the EUR/USD and this bullish pattern would also be in play if the currency pair breaks above its year to date high at the same level mentioned earlier. If EUR/USD drops below 1.2990, the next stop should be 1.12 followed by 1.1050.

Chart Of The Day

Leave a Comment

Your email address will not be published. Required fields are marked *