The EUR/USD surges to its higher level in over a year, regardless fundamental data, hovering right now around yesterdays’ target of 1.3540, embracing its upward momentum: early data shown situation in Spain continues to deteriorate amid austerity measures, with a quarterly GDP for the country of -0.7%. But that’s no news. Economic sentiment in the EU rose to 89.2 in January, from 87.8 in December, beating also forecasts, while Italian bond auction saw an improvement in yields, feeding Euro demand.
The pair is now set to continue advancing towards 1.3585 in the short term, and once above, price could extend up to 1.3620 area later today, supported by technical readings in the 4 hours chart, where momentum bounced from 100 while RSI heads also higher above 70. A weekly close above 1.3620 will left doors open for a test of 1.3860 strong midterm static resistance level.
Downside risk now comes from the US, particularly with FOMC economic policy later today: although highly unlikely, if the Federal Reserve suggests QE may see an end this year, dollar may gather momentum across the board, even against the euro, with 1.3480 then at sight. Once below, 1.3410/40 area comes next.
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