This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
EUR/USD holds $1.12
EUR/USD is trading at a level not seen since early March, and the move is almost largely down to the pullback in the greenback. As I stated yesterday, the update from the Federal Reserve was so vague traders are left in the dark as to when interest rates will rise.
For too long there was major pressure on the Fed to be hawkish in their outlook, and that we have had a spate of soft economic indicators, coupled with a slight dovish tone from the US central bank, traders are unwinding their long trades on the dollar. Dealers in continental Europe are on holiday today as it is May Day, and trading volumes and market volatility are anticipated to be low.
EUR/USD has been in an upward trend for over two weeks now, and $1.12 is acting as support, and the initial target is $1.13. A move beyond that will bring the resistance at $1.14 into play. If $1.12 is punctured, the 50-hour moving average of $1.1150 will provide support, and $1.11 will be the next level of support below that.
