EUR/USD: news from the battlefield
By Elizaveta Belugina
EUR/USD met resistance in the $1.3850/80 area this week. The pair is drawn to support in the $1.3750 area.
Comments from the ECB officials brought back that the expectations that the regulator will do something to eliminate the threat of deflation. The central bank probably finds itself very uncomfortable with EUR/USD close to $1.40. The talk about the ECB will be quite common in the coming days as the central bank’s meeting will take place next Thursday. This together with the market’s month-end rebalancing and Ukraine tensions might keep euro under pressure, though we don’t think that the single currency will start moving meaningfully lower.
US final GDP growth was revised up less than expected (to 2.6% from 2.4%, while the consensus was 2.7%). That didn’t help euro bulls much, as US labor market data came out quite positive. On Friday traders will be watching German CPI and French consumer spending.
The close below $1.3780 (38.2% Fibo of the February-March advance) will be a bearish sign. Below $1.3750 support is at $1.3725 (50% Fibo) and $1.3709 (55-day MA). Resistance is at $1.3805 and $1.3850. We see negative MACD divergence at the weekly chart, but daily picture looks neutral.
Chart. Daily EUR/USD
To contact the writer of this story: Elizaveta Belugina at email@example.com