EUR/USD continues to dance around $1.38

For the time being, EUR/USD continues to find support just below the $1.38 level.

Today is the turn of US data to hit the markets, with monthly core durable goods and flash services purchasing managers index figures to be released. Later on, just after US markets close, we will get an opportunity to review the latest US bank stress-test results.

Yesterday saw the Bank of Finland governor Erkki Liikanen infer that the European Central Bank still has a few things up its sleeves it would use to tackle the low inflation rate. Primarily the expansion of the negative deposit rate idea, along with large-scale asset purchases or quantitative easing. Of course talk is cheap and that is something that the ECB has been happy to do for some time, but the transition into action has been much slower to materialise. It is primarily equities that have moved on the back of these comments. Should something more substantial than words occur, we could see currency markets react. For the time being, they are suffering from deja vu.

The EUR/USD levels I discussed yesterday and in Chris Westons article still apply. 

Spot FX EUR/USD chart

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