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Forex: EUR/USD testing Monday’s highs, around 1.3380

The bloc currency is trading in the area of 1.3375/80, testing at the same time Monday’s highs after the close of the European markets. Inflows into the euro have accelerated, as market participants intensify the exodus from the sterling, rapidly losing ground against the buck.

As of writing, EUR/USD is gaining 0.20% en 1.3377 facing the next hurdle at 1.3393 (high Feb.15) followed by 1.3401 (MA10d) and then 1.3415 (hourly high/low Feb14).
On the downside, a breach of 1.3307 (low Feb.15) would expose 1.3286 (low Jan.24) en route to 1.3276 (MA55d).

Forex Flash: Is balance sheet expansion a deflation remedy? – UBS

In looking at individual monetary policy, especially localized to the G5, the actual influences on exchange rates recently – on an absolute level – have not exactly been clear-cut. According to Research Analyst Gareth Berry at UBS, “There is no firm relationship between outright balance sheet expansion and currency strength or weakness. Japan and Switzerland have actively expanded their balance sheets with little success of escaping disinflation/deflation (until recently), while every instance of the ECB purporting to 'do the right thing' via balance sheet expansion has also been greeted with the market returning to bidding the euro.”
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