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Can Euro Hold the Lows?
The latest salvo from the Fed shaved more than 100 points form the EUR/USD pair as the combination of relatively upbeat Janet Yellen and continued remarks by ECB Couevre that the ECB fully intends to go full QE in 2015 weighed on the pair. Yet the net takeaway from the Fed meeting is that any normalization is 6 months away at the earliest which is in fact a delay from Q1 expectation from the markets. In addition it is not yet certain just how aggressive the ECB will be. Tonight’s IFO report, if it is as upbeat as the ZEW data earlier this week could provide the EUR/USD with a small bounce. On the other hand if the IFO data misses it could add to the pressure and put the 1.2250 test in view
Techincally the EURUSD looks like it has curved out a strong support bottom near the 1.2250 level, but the base could just be a pause that refreshes in the overall downward draft. So a test of this level could be crucial as a break could open a move towards the 1.2000 figure