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Forex: EUR/USD clings to 1.3100

FXstreet.com (Barcelona) - The shared currency is hovering over the key resistance at 1.3100 on Monday, bolstered by the increasing demand for riskier assets. Collaborating with the upside, the USD continues to suffer as market participants are still digesting the poor US GDP figures from last Friday.

“There is now a clear market consensus in favour of an ECB rate cut on Thursday; a view we subscribe to. In the Bloomberg survey around 61% of forecasters favour a move and, if this week’s economic data are soft, it is possible that the conviction behind this expectation will grow”, suggested Jane Foley, Strategist at Rabobank.

At the moment, the cross is up 0.38% at 1.3098 and a break above 1.3130 (high Apr.19) would aim for 1.3202 (high Apr.16) and then 1.3229 (50% of Feb-Apr slide).
On the flip side, support levels align at 1.2988 (low Apr.25) ahead of 1.2954 (low Apr.24) and finally 1.2948 (MA200d).

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The euro advanced against the dollar on Monday after the formation of a government in Italy following months of political uncertainty. European stocks were also lifted by the news, while Italian bond yields fell at an auction to their lowest in over 2 years.
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Forex: GBP/USD falls below 1.55 to test 1.5490

The Sterling is extending its decline from 2½-month at 1.5545 against the Greenback with the pair trading below the 1.5500 level to test the 1.5490 key resistance. Currently the pair is at 1.5495, almost flat on the day.
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