Will EUR/USD re-test 1.3800?

There is still no reaction to last week’s very strong US unemployment figures.

The positive economic data does not look to have been enough of a catalyst to turn the trend in EUR/USD. The Federal Reserve has stated that the US unemployment rate is one of the barometers it will be using to determine when reduction of the monthly $85 billion debt-purchasing scheme should begin. The level most commonly named is 7%, and now we have reached this speculation has increased. It was never likely that one single piece of data would be enough to change the minds of the voting members of the FOMC, but this is certainly a headline act.

Today will see the European Central Bank president Mario Draghi speak at a Bank of Italy conference, and no doubt he will be asked about his thoughts on the health of a number of European countries. At the moment, the fears over economic growth in Italy and Spain and the potential for France to fall back into recession don’t appear to be at the forefront of traders’ minds.

As a number of my colleagues have highlighted over the last week, the 1.3800 level remains an important hurdle to clear in order for EUR/USD to set higher highs.

Spot FX EUR/USD chart

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