EUR/USD: market will wait

by Admin

Not one but three central banks will announce their monetary policy in the next 24 hours, starting next Asian session with the BOJ. And one has to wonder how much more aggressive the central bank could be today, in order to revive yen selloff. Anyway if Koruda succeed in weakening the local currency, the EUR may receive a short term boost from EUR/JPY demand. Even harder is to imagine and aggressive Draghi from ECB: the Central Bank President has to acknowledge the record unemployment, the lousy PMI’s reading all over the area, and the Cyprus turmoil, so won’t be expecting anything above ultra dovish stance. 

In the meantime, market will likely wait for these decisions before taking positions in the EUR/USD, which will probably keep the pair around recent range. In the 4 hours chart, there is a short term ascendant trend line coming from 1.2750 and currently around 1.2790, also daily low, offering support: once below, a ride towards 1.2750/70 could be expected, yet the year low will hold. 

Steady gains above 1.2840 may see the pair aiming back towards 1.2880 area, yet further gains seem limited for today.

View Live Chart for EUR/USD