Euro dips to $1.38

The EUR/USD is trading around the $1.38 level as traders return from the Easter holidays.

The euro is slightly lower versus the US dollar, with trading volumes and volatility low, as traders make their way back to the market after the long weekend.

The only economic announcement we are expecting from the eurozone is at 3pm (London time), when the consumer confidence report will be revealed. The European Central Bank has come under pressure lately, after weak inflation figures suggested the region was in deflation. The consensus is for a reading of -9 and if the report comes in below estimates, it could push the EUR/USD lower.

The situation in Ukraine is still hanging over the euro and as I previously stated, countries like Germany, France and Italy depend heavily on Russian energy. As long as tensions remain high in eastern Ukraine, the euro will find it difficult to reach $1.39. Traders are fearful that if violence breaks out, it could disrupt the supply of natural gas from Russia into the engine room of the eurozone.

If the consumer confidence figures come in worse than expected or if uncertainty in Ukraine increases, the EUR/USD could move towards the 200-day moving average of $1.3634.

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.

Find articles by analysts

Find out more about