Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
Euro tacks on as political risk is eyed
On Monday, the common currency managed to grow because a dive in American Treasury revenues brought down the evergreen buck, although trading turned to be relatively quiet ahead of a number of speeches by major bankers as well as key political developments in Italy and Germany.
With the evergreen buck’s rebound since it reached a three year-minimum on February 16, the common currency gained 0.3% hitting $1.2328.
The common currency came 2 cents off its recent maximum of more than $1.25. This year the currency has managed to add in the face of dollar weakness and market experts told traders were cautious as for taking big positions because of political risks.
On Sunday, Italians are going to vote in a national election, while in Germany, the EU’s number one economy, the leading political parties are going to decide on a coalition deal, which could potentially secure Angela Merkel a fourth term, as the country’s chancellor.
Market experts pointed to weekly futures reports, which showed net long positions in the common currency had dived for the third week. On Monday, ECB Governor Mario Draghi's appearance in the European Parliament as well as euro zone inflation data to be published this week also contribute to a nervous outlook for the common currency.
The dollar index, tracking the US currency versus a group of six key counterparts, dived 0.2% reaching 89.685. The previous week it acquired approximately 0.9% and drifted away from a three-year minimum of 88.25 demonstrated on February 16.
The major US currency headed south 0.1% against the Japanese yen hitting 106.65 and paring some of its earlier losses in Asia trade.
While equity markets started the trading week on a firm footing and pointed to sturdy risk appetite, futures data hinted that market participants were reducing their risk exposures.
Let’s look what moves the market today.
The European Central Bank will publish the main refinancing rate and make a statement on Thursday, June 4, at 14:45 MT time. Also, the ECB press conference will be later at 15:30 MT time.
EUR and gold moved up