3 Apr 2015
EUR/USD and the life beyond 1.10
FXStreet (Edinburgh) - The single currency extended its advance vs. the US dollar on Good Friday, climbing as high as 1.1030 and thus closing its third consecutive week with gains.
EUR/USD it’s all about the dollar
After the brief drop to the 1.0700 neighbourhood towards the middle of the week, the European currency managed to stage a bull run of more than three big-figures.
The main drivers behind this week’s ascent were the euro’s capacity of isolating from all the unnecessary noise stemming from the Greek front, which proved once again that the only thing prevailing in the negotiations is uncertainty and a rising skepticism in the global markets.
Another key driver was, of course, the dollar. Despite an ephemeral attempt to regain levels near 99.00 the figure in terms of the US Dollar Index (DXY), it has only proven so far its failure to re-birth following the blow at the last FOMC meeting in mid-March.
And then there are these ‘green shots’ in the euro region: improving economic sentiment and consumer confidence, strong recovery from the manufacturing PMIs, consumer prices looking to put further distance from any deflationary trend, just to mention some factors supporting the single currency.
Of course, the broader picture remains unchanged, that is, the divergence in monetary policies from the Fed and the ECB, which is (has been) the major driver of the generalized bearish outlook on the pair in the medium to longer term.
EUR/USD now faces a tough challenge, which is trying to overcome the critical resistance band at 1.1030/1.1060 on a more sustainable basis. That might give markets a more palpable idea of the ability of the euro to survive above 1.1000.
EUR/USD it’s all about the dollar
After the brief drop to the 1.0700 neighbourhood towards the middle of the week, the European currency managed to stage a bull run of more than three big-figures.
The main drivers behind this week’s ascent were the euro’s capacity of isolating from all the unnecessary noise stemming from the Greek front, which proved once again that the only thing prevailing in the negotiations is uncertainty and a rising skepticism in the global markets.
Another key driver was, of course, the dollar. Despite an ephemeral attempt to regain levels near 99.00 the figure in terms of the US Dollar Index (DXY), it has only proven so far its failure to re-birth following the blow at the last FOMC meeting in mid-March.
And then there are these ‘green shots’ in the euro region: improving economic sentiment and consumer confidence, strong recovery from the manufacturing PMIs, consumer prices looking to put further distance from any deflationary trend, just to mention some factors supporting the single currency.
Of course, the broader picture remains unchanged, that is, the divergence in monetary policies from the Fed and the ECB, which is (has been) the major driver of the generalized bearish outlook on the pair in the medium to longer term.
EUR/USD now faces a tough challenge, which is trying to overcome the critical resistance band at 1.1030/1.1060 on a more sustainable basis. That might give markets a more palpable idea of the ability of the euro to survive above 1.1000.