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The euro starts 2014 with an interesting test level.Lets summarize the last moves. On November 7, the ECB cut its main refinancing rate to a all time low at 0.25%.this marked the low of EurUsd at about 1.33.
From this date Euro has been up against all till the lasthigh of last week for EurUsd at almost 1.39 on 27 December.On the other side, Eurusd has gone all the way down till 1.36 eversince.So, whats up now ?Technically speaking, we kind of reached a support in the 50% fibo retracement zone.We should expect a rebound in the euro has it is unlikely to expect any change in the ECB policy, and we could say no new bad news is to be expected. It seems most countries except France show signs of recovery.Most "non euro" european countries see their currency appreciate against euro, confirming the entire regionis finding strength. The coming german CPI rate of 1.4% should unwind any expectation about additional ease from ECB.While german data is not showing south, nothing justifies a euro bear.Should the 1.3570-80 level not hold, fast shorts can be played toward 1.35, and ultimately 1.33 supports, butshort term sell offs should mainly be seen as buying opportunities, while beyond the key level of 1.33.
From this date Euro has been up against all till the lasthigh of last week for EurUsd at almost 1.39 on 27 December.On the other side, Eurusd has gone all the way down till 1.36 eversince.So, whats up now ?Technically speaking, we kind of reached a support in the 50% fibo retracement zone.We should expect a rebound in the euro has it is unlikely to expect any change in the ECB policy, and we could say no new bad news is to be expected. It seems most countries except France show signs of recovery.Most "non euro" european countries see their currency appreciate against euro, confirming the entire regionis finding strength. The coming german CPI rate of 1.4% should unwind any expectation about additional ease from ECB.While german data is not showing south, nothing justifies a euro bear.Should the 1.3570-80 level not hold, fast shorts can be played toward 1.35, and ultimately 1.33 supports, butshort term sell offs should mainly be seen as buying opportunities, while beyond the key level of 1.33.
