Economic news (7 March 2013) – The euro managed to gain some ground against the dollar early on Thursday, ahead of the ECB’s interest rate meeting later today. The euro fell to its lowest level in three months, touching $1.2962 during yesterday’s session. The single currency was ‘’hit hard’ by the greenback as much better-than-expected US jobs data was released on Wednesday, prompting that the dollar could reach its highest level in more than six months.
According to analysts, one of the main reasons for the dollar’s gain against most major currencies is the Fed’s discussions on exiting the stimulus program, unlike many central banks which consider additional easing measures.
The euro managed to cross the psychological mark of $1.3000 early on Thursday and was trading at $1.3020 at the time of writing. Standard & Poor’s upgraded Portugal’s credit-rating outlook from negative to stable, which gave a further boost to the euro.
Investors will be watching closely the ECB interest rate meeting today as it is expected to cause high volatility on the Forex market. Leaving the interest rate unchanged at 0.75% is widely anticipated by market makers; however, fears for the Eurozone’s economic outlook triggered speculations about interest rate cuts in the near future.
Technical analysis
EUR/USD
At yesterday’s session, the euro depreciated from 1.3065 to 1.2960. This morning the currency pair was trading at 1.2975-1.2990.
Should the euro overcome the resistance at $1.3000-1.3015, its aim will be reaching and testing the zone at 1.3035-1.3065. If successful, the upward trend will continue to 1.3100-1.3120. If the euro falls below the support zone of 1.2990-1.2965, it is expected to find a next support in the 1.2940-1.2920 area. In case of a breakdown, the downward trend will continue to 1.2900-1.2870.
Source: dfmarkets.co.uk
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