EUR Trading Outlook
The Euro (EUR) the EUR/USD fell to 1.3110 on the Spanish bond failure before finding support and staging a small recovery. The ECB held at 1.0% as widely forecast and the President Draghi was slightly hawkish talking of medium term inflation risks and the Spanish bond auction was weak on the back of bond vigilantes.
The Euro (EUR) the EUR/USD reversed to 1.3200 after the FOMC minutes with the recent rally stalling at 1.3380 and we will now look for support ahead of the ECB rate meeting tonight. EUR/JPY was more stable but is under Y110 still and will need to reclaim this to get some upward traction back.
The Euro (EUR) the Eurozone showed the two speed nature of the global recovery with March PMI fell to 47.7 vs. 47.6 previously. The Debt crisis has forced European governments to pass Austerity budgets and this has led to a severe contraction of economic activity and a likely recession.
The Euro (EUR) the EUR/USD was strong but quiet in a 50 pip range above 1.3300 failing to retest 1.3380. The market is torn as to future direction with the USD strength countering the post Eurozone Debt Crisis Euro recovery. The ECB meeting this week will be critical for the central banks outlook as over the weekend they expanded the EU bailout fund to the 1trn to further sure up confidence. A break of 1.3380 will open up the 1.3500 multi-month resistance.
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