Euro/dollar is moving above the round level of 1.14, enjoying bad news coming from China and behaving like a classic safe haven currency. The high so far is 1.1402, with EUR/USD moving slowly.
This round level capped the pair beforehand, but the really strong resistance line still looms above.
Update: German ZEW Economic Sentiment falls to 1.9 – EUR/USD follows
Yesterday, the pair moved high but hesitated, especially as trading liquidity was low on the background of the US holiday.
China reported an 11th straight month of falls in imports, and also exports dropped. While GDP figures often seem peculiar, it is harder to game trade numbers. This sends shivers across the world.
The euro enjoys safe haven flows in its new role as a funding currency.
On the dollar side, we have heard bearish comments from FOMC member Lael Brainard, who voiced concerns about the global economy and certainly doesn’t want to raise rates soon.
1.1460 is an important level to watch: it was the peak after the big fall to 1.0460 early in the year, 1000 pips above the bottom. In addition, we have seen the pair fall off this level in September, when the Fed decided not to raise rates.
More: EUR/USD: Limited Upside Risk; Sell Rallies – Credit Agricole
