EUR/USD to 1.15

EUR/USD to 1.15

EUR/USD to 1.15

Meanwhile the resilience of euro signals a potential move to 1.1500. For the past 9 trading days, EUR/USD held its break above 1.1300 and the lack of market moving economic data means a move to 1.15 this week will be determined by risk appetite. Last week ECB President Draghi avoided talking down the currency because they want more time to see how their latest stimulus program affects the economy so for the time being, there will be no changes in policy. No news is good news for the euro because it means there shouldn’t be any significantly negative euro news flow to drive down the currency. Eurozone industrial production is scheduled for release on Tuesday but this a second tier report. The greatest risk for EUR/USD is the dollar and U.S. earnings. If there is a major upside surprise in U.S retail sales, we could see EUR/USD drop to 1.1300 but probably not much beyond that. Earnings on the other hand will affect stocks and in turn in the euro.

Technically, as long as EUR/USD holds above 1.13, which is where we have the 23.6% Fib retracement of the 2014 to 2015 decline converging with the 20-day SMA the uptrend remains intact and a move to 1.15 is likely. If this level is broken however, we could have a deeper slide to the March 24th swing low of 1.1145.

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