European Central Bank members are continuing to toe the party line, as they confidently state that the EU’s fragile recovery is still moving in the right direction, regardless of the global issues destabilising equity markets. Sentiment in the EUR/USD rate has been muted for most of the week, as currency traders monitored developments in Ukraine and the consequences an escalation might have on the EU.
Although not directly related, it is worth noting that New Zealand has become the first western central bank to raise its base rates. The effects of this are relatively small to the euro, but it is a psychological hurdle that has now been cleared.
Looking at Chris Beauchamp’s article yesterday, I agree that a close comfortably above the $1.3900 level would pave the way for the EUR/USD to make a move higher, ultimately targeting the $1.4200 region. In the short-term, the resistance that was originally encountered at the 1.3800 level is likely to offer some solid support.