EUR/USD Has a Chance to Rise to 1.22 As ECB Policymakers Dither on Rate Cuts

Published by
Written By: Eno Eteng (MSTA)
Share
    Summary:
  • The EUR/USD is up today after a policymaker indicated that the ECB was unlikely to cut rates as there are no added benefits from such action.

Reuters is quoting sources close to the situation as saying that despite comments by the ECB board members, the bank is not likely to cut its policy rate. The reasons provided are the lack of additional benefits from such action.

A policymaker is said to have told Reuters that ECB’s focus is more on financing conditions and less on the exchange rate, suggesting that the ECB would be comfortable with more Euro appreciation.

The situation has calmed selloff fears on the Euro and has propped up the EUR/USD on the day.

Technical Outlook for EUR/USD

Price is up 0.24% on the day, as bulls take in the Reuters report and act on the expectation that the ECB will not be cutting rates; a Euro-positive situation. The bullish push is aiming for 1.21685, and a break above this level targets the 1.22661 resistance. Restoration of the uptrend requires that the EURUSD closes above the 1.23302 price level, which was the previous high obtained on 6 January.

On the flip side, a rejection and pullback from the 1.21685 resistance could bring in downside targets at 1.20890 and 1.20549 into the picture. Further decline below these levels send the EUR/USD to sub-1.20000 levels.

EUR/USD Daily Chart

Written By: Eno Eteng (MSTA)

Eno is a certified financial technician and member of the UK Society of Technical Analysts. He loves to trade and write about stocks, Forex, and CFDs. Since 2009, he has consulted several financial companies as a trader and strategy developer. His work can be seen on several forex blogs and trading educational websites.

Published by
Written By: Eno Eteng (MSTA)