The USD did gain traction against the euro, but in reality it was the only day it closed stronger than the single currency throughout last week. The greenback was helped by the FOMC minutes but it looks like the real boost lower for the EUR/USD came earlier on Wednesday, on news headlines circulating comments that the ECB is considering negative deposit rates for commercial lenders that are parking excess cash at the central bank.
In retrospect the fact that this was discussed should have been no new news for investors and this became increasingly evident after Draghi downplayed these hyped rumors saying that there was no news with regards to negative rates.
Throughout the second half of November the EUR/USD found significant resistance around 1.3550. We should expect the US dollar to continue to gain traction in the medium to long term. But in the interim investors should caution as Bernanke's successor takes the lead and will likely provide headwinds, as she continues to manifest the dovishness that she has been associated with.
We're expecting the EUR/USD to remain mostly biased lower. A key break above 1.3570 – 1.3618 region on daily close will expose 1.37 levels, while a daily close below 1.3440 should aim to target 1.33 levels.
In retrospect the fact that this was discussed should have been no new news for investors and this became increasingly evident after Draghi downplayed these hyped rumors saying that there was no news with regards to negative rates.
Throughout the second half of November the EUR/USD found significant resistance around 1.3550. We should expect the US dollar to continue to gain traction in the medium to long term. But in the interim investors should caution as Bernanke's successor takes the lead and will likely provide headwinds, as she continues to manifest the dovishness that she has been associated with.
We're expecting the EUR/USD to remain mostly biased lower. A key break above 1.3570 – 1.3618 region on daily close will expose 1.37 levels, while a daily close below 1.3440 should aim to target 1.33 levels.
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