EUR/USD pulled back down in the first half of the previous week, performing a classic and healthy retracement before breaching important long-term resistance. One of the fundamental factors, except weakness of the greenback, was ECB publishing Account of Monetary Policy meeting. There was a tweak from the regulator, a rumor about possible tapering unwind. In a simple word, the Central Bank is preparing the markets for faster decrease of the cheap borrowed capital. This change in the policy should attract foreign investors to direct capital flows to the Euro Zone. Forex speculators reacted immediately.
We went long again on EUR/USD on Thursday at 1.19622 rate and held this position through the Friday’s US CPI report. A profit of 234 pips in 32 hours is enormous for this pair. Such a rapid appreciation tell about the only possible future scenario: bullish continuation. We already showed a long-term weekly chart and we already spoke about the importance of 1.2100/2200 resistance range in one of our previous posts last week, so we do not see any reason to repeat ourselves. What’s next? ECB Inflation report scheduled for next Wednesday. CPI (YoY) is widely expected to remain at the same level at 1.4% in December. So any positive change for even 0.1% would give a lift for the pair to continue posting fresh highs. Stay tuned for our intraday analysis to determine the best level to join the party.
Fundamental and technical analysis of most popular currency pairs and commodities on Forex market, based on real trading conditions together with years of experience of online trading.
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