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

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.