ECB governor Draghi had a very balanced commentary with the unchanged rate decision overnight. He attributed the recent rise in the EURO as confidence in the region and said it was too early too tell if a stronger currency would affect the recovery. Competent financial journalists will be scrambling for a catch phrase other then “currency wars” when writing about the euro this weekend!
The spot EUR/USD rate did respond by trading lower to 1.3390. If we end the week below 1.3460 (which looks like we will at this stage) we like setting shorts with a stop through 1.3715 and targeting 1.27 on a weekly chart.