EUR/USD rises to 1.0850 and beyond, recovering from the lows in a wild fashion – more coming
The euro is torn between being pressured from more potential action from the ECB (also driven by crashing crude oil prices) and by its safe haven appeal, also a result of the ECB’s already loose monetary policy.
The ECB has set a negative deposit rate in June 2014 and made further cuts since then. This, together with the QE program announced a year ago, sends money out of the euro-zone.
But when things get bad, and they are currently bad, money is repatriated, flowing back in.
Resistance awaits at 1.0880, 1.0950 and then the round number of 1.10. However, the tide could turn the pair down. We will soon learn about retail sales and the unemployment rate in the euro-zone. Markit’s retail PMI remained below the 50 point line separating growth and contraction, but actually improved to 49 points.
Support awaits at 1.08 and 1.0710. It’s important to note that markets are wild and choppy, thus making these technical lines a bit less resilient, to say the least.
