The European Central Bank just can’t let the euro rise. Or so it seems. After we have seen poor data in the US and dovish messages from quite a few sources, the ECB strikes back.
ECB member Ewald Nowotny says it’s quite obvious that an additional set of instruments is necessary – hinting more QE. EUR/USD falls.
Nowotny is not necessarily a dovish member of the ECB: he heads the central bank of Austria, one of the richer countries in the euro-zone. He acknowledged that the ECB is missing its inflation target and that also core inflation is too low.
This sent EUR/USD down from the highs of nearly 1.15, 1.1494 to be precise, all the way down to 1.1425, breaking below the critical 1.1460 line the pair fought so hard to overcome.
It is important to note that the US dollar remains weak across the board, and this includes both safe haven currencies such as the yen as well as risk currencies such as the Australian and Canadian dollars.
Further support awaits at 1.1375, followed by 1.1290. 1.1460 turns into resistance, with 1.15 and 1.1560 next in line.
More:
- ECB keeps EUR/USD from topping 1.20 – Morgan Stanley
- EUR/USD: Limited Upside Risk; Sell Rallies – Credit Agricole
Here is the chart:
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