The solid trend of a strengthening euro against the US dollar has, at least for the moment, come to a halt. Currency traders are looking to gauge a little guidance from today’s US data. And the bigger question still remains about when the Fed will decide to embark on reducing its current monthly $85 billion quantitative easing policy.
Coupled with the question mark over US fiscal policies this year, we also have looming resistance from the longer-term Fibonacci retracement levels, as outlined in Brenda Kelly’s article earlier this week.
Certainly, in the short-term, the bullishness of EUR/USD traders has fallen well short of the optimism required to break Brenda’s 1.3833 level. The driving force behind this move is the ongoing devaluation of the dollar, as the Fed continues with its planned printing of money in an effort to help stabilise markets. Any pull-back from these levels could well be short-term, as the overriding issues will continue for some time to come.