Despite continuous effort from various ECB members to talk it lower, the Euro remains strong. This led ECB President Draghi to state over the weekend that “the European Central Bank will ease monetary policy further if the euro keeps strengthening”. EUR/USD gapped 50 pips lower on the open as a result of this, but is now back above 1.3850. Traders have been ignoring comments from ECB officials and it’s hard to see why that should change now. The market is sending a clear message: talk is cheap, the ECB needs to act!
I expect the EUR/USD to fill the gap and break again above the 1.39 level ahead of Wednesday's CPI release. In the cross pairs, keep an eye on EUR/CAD as we have the Bank of Canada meeting this week.
I expect the EUR/USD to fill the gap and break again above the 1.39 level ahead of Wednesday's CPI release. In the cross pairs, keep an eye on EUR/CAD as we have the Bank of Canada meeting this week.