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The EUR/USD is trading at $1.3791, up 0.08% as the euro slowly but surely claws back the losses it suffered after Janet Yellen’s comments that the Federal Reserve will no longer only use the unemployment rate as a benchmark for monetary easing, instead using a broader group of economic indicators. This suggestion that the Fed could increase interest rates sooner than traders initially thought drove the euro below the $1.39 level.
The crisis in Crimea is holding the euro back from making a quicker recovery, as the eurozone relies on natural gas from Russia. Brussels is hoping that Moscow doesn’t reduce gas supply to the west, while the US has already imposed some sanctions on Russia. If we were to continue this tit-for-tat sanctions war, we could see the euro 100-day moving average of $1.3690 provide support.
In the short term, the euro is finding resistance at the 50-hour moving average of $1.3819. A break through that could put us on track towards the 200-period MA of $1.3880.