EUR/USD: news from the battlefield
EUR/USD is consolidating slightly above the Friday low of $1.3745. The pair is trying to stabilize around $1.3770, following the sharp sell-off provoked by the last week’s ECB promise to cut rates in June.
In our view, Draghi’s promise to cut rates in June could become a turning point for the EUR/USD bullish trend. The pair traded in a rising channel since summer 2013, but it is clear that the trend is weakening. There is a strong 2008-2014 resistance line ahead around the $1.4000 mark.
Break below the $1.3750 support will open the way to our next target at $1.3670 and then - to the $1.3400 mark. The closest resistance lies at $1.3800.
The next near-term event to watch for the euro traders will be the tomorrow’s ZEW Survey in the euro area and Germany, with a forecast pointing to a small improvement.
Chart. Daily EUR/USD