EUR/USD looks to test $1.39 again

This week’s economic data releases have seen EUR/USD move back above the $1.38 level.  

The last couple of months have seen EUR/USD oscillate around the $1.38 level in a $1.37-$1.39 range, unable to make a meaningful break either above or below these levels. Today’s price movement strongly points towards a continuation of this upwards leg.

The tone of comments made by Janet Yellen and a number of Federal Open Market Committee members, hinted towards a slightly slower pace for the implementation of increased interest rates. The trigger for this has been the markets anticipation of slightly higher US jobless claimants. Markets have been trying to gauge a realistic timeline for rate rises following the initial comments made by Fed chair Janet Yellen. It appears that a policy similar to her predecessor, Ben Bernanke, of talking about it early and talking about it frequently, will pave the way for a more calculated and less reactionary market when rates are finally increased.

If this afternoon’s US unemployment claims increase, this could add to the momentum. We would maintain our current long exposure to the EUR/USD and look for a retest of the $1.39 level. Only a close below the 50-day moving average would lead us to change our outlook.

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.