EUR/USD: another eventful week
Another eventful week is in store for the euro. On Monday Germany will release Ifo Business Climate index. On Tuesday the euro zone’s final inflation data for January will be published: according to the initial estimate, consumer prices contracted by 0.6%. This was the first decline since late 2009.
In addition, the ECB’s President Mario Draghi will speak on Tuesday and Wednesday. Pay special attention to the second one as Draghi will testify to the European Parliament.
On Thursday the ECB will conduct the third round of TLTRO. Within this program the ECB will provide liquidity to commercial banks of the region so that they could lend to the real economy. Usually TLTRO leads to lower long-term interest rates and weakens euro. The higher is the demand for credit from commercial banks, the stronger is the bearish impact on euro. On Friday watch important economic data from Germany and France.
Despite risks associated with Greece, market players are rather calm and may remain so supporting the single currency. Temporary solution of the Greek problem will be positive for the euro. Resistance for EUR/USD lies at 1.1500 and 1.1650. Support is at 1.1200 and 1.1100.