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EUR/USD: not a rebound yet

Kira Iukhtenko, FX BAZOOKA analyst

EUR/USD consolidates around $1.3830 on Tuesday after it reached a 1-week high at $1.3875 during the late American session. Euro holds gains before a report today at 9:00 GMT that may show German business climate deteriorated. ECB President Mario Draghi gives a lecture at Sciences Po in Paris at 16:00 GMT.  Beware of Draghi’s hints on deflationary pressures because of the strong euro.

Despite the yesterday’s sharp rebound, there haven’t been any persuasive signs of growth resumption. In the current circumstances there is a high chance for another dip into the $1.3730/00 area. We need to fix above the yesterday’s highs around$1.3880 to open the way for the recent peaks of $1.3970 and higher.

The ECB officials continue expressing concerns about the high euro, but their rhetoric is evidently not enough to push the currency significantly lower. However, in case there won’t be enough bullish catalysts for the single currency, we may see a more sideways trade in the coming weeks. 

Chart. H4 EUR/USD

To contact the writer of this story: Kira Iukhtenko, analytics@fxbazooka.com 

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