FXstreet.com (Córdoba) - The shared currency broke above the
1.3300 psychological level and stretched to its highest since April
2012 on Friday against the greenback, as a wider-than-expected US
trade deficit encouraged investors to continue to sell the USD.
The euro was already buoyed after the ECB President gave no hints
the central bank was contemplating a rate cut any time soon.
Meanwhile, US stocks slipped weighed by the financial sector after
disappointing earnings reports while European indexes were mixed.
"Altogether, the news from the past 24 to 48 hours has mostly been
negative for the greenback and positive for foreign currencies",
said Nick Bennenbroek, Head of Currency Strategy, Wells Fargo Bank.
"While it is possibly a mild surprise that the U.S. dollar is not
showing more consistent weakness, we suspect the near-term
direction remains lower for the greenback against most foreign
Euro breaks above 1.3300
EUR/USD broke to the upside soared toward a fresh 9-month high of
1.3364 before easing slightly. The short-term bias remains positive
for the cross, although with indicators in overbought levels,
pullbacks could not be dismissed.
The pair has come a long way from this week's lows, having risen
over 350 pips, and the 1.3400 level appears as the next bullish
target, followed by 1.3450 and 1.3485 (2012 high).
Fan Yang, analyst at FXTimes notes that today's move breaks above a
previous consolidation resistance at 1.3306. "The break is a sign
of bullish continuation. If the market can hold above 1.33, it
would be a very strong sign that bulls are in charge of this
market", he said.
Meanwhile, the Danske Bank team comments that relative monetary
policy will remain a support factor for EUR/USD as the Fed is
expanding its balance sheet significantly and the ECB stays on
hold. "We forecast 1.35 before summer, but doubt that we will see a
strong uptrend in EUR/USD as the euro offers no carry, as short
euro positions have been unwound, and as peripheral bond spread
tightening has run very far already".