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EUR/USD in Play – Chart and Levels
EUR/USD in Play -- Chart and Levels
Thursday’s ECB meeting is one of the most important event risks this week. EURO has been biding its time trading between 1.1235 and 1.1465 pre-ECB. Which end of this range breaks hinges upon Mario Draghi’s tone. If he’s concerned about the strong euro and talks about the possibility of more stimulus, then 1.1235 could give. If he simply says they need more time to see the effects of stimulus and points to recent data improvements as a sign of their easing measures working, euro could make a run for 1.1400. From a data perspective, there’s less for the central bank to worry about in April vs. March when there was significantly more deterioration than improvement in the economy. So the question now is whether the 3 to 6 cent rise (depending where you’re measuring from) in EURO since March rings alarm bells for the central bank.
Technically, the EUR/USD is trading right around its 50-day SMA. A break of the 38.2% Fibonacci retracement would be needed for a near term top and pullback to 1.1150. Otherwise the uptrend remains intact. Resistance is at the April high near 1.1465.