EUR/USD hangs on to gains made in wake of ECB

Mario Draghi inspired the pair to shoot through the key $1.38 level, and so far the gains appear to be holding on.

A near two-month high for EUR/USD does not necessarily signal that traders believe the worst is over for the eurozone, even if Mario Draghi thinks the currency union’s overall economy is showing signs of health.

However, for now, traders seem to content to push the currency pair higher, although dollar weakness is probably the more dynamic element at work here.

All in all, we can now see that EUR/USD is pushing through the downtrend that has capped gains since mid-2008. Assuming we can break through the $1.39 level, which was touched during a spike in late December, if there is consolidation here then it may provide an opportunity. Traders could then get on board the upward move, with a potential target of $1.40 in sight.

Spot FX EUR/USD chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.