Yellen may make euro cry

Helen Rush
Helen Rush
Senior Analyst – Capital Markets •

EUR/USD has gone too far on hawkish comments of the ECB’s Draghi. It touched 1.1335 hitting 11-month high. The thing is that the ECB’s chairman during his speech turned out to be rather optimistic, hinting the monetary policy change was coming sooner than expected.

EUR/USD has gone too far on hawkish comments of the ECB’s Draghi. It touched 1.1335 hitting 11-month high.

The thing is that the ECB’s chairman during his speech turned out to be rather optimistic, hinting the monetary policy change was coming sooner than expected. He said the economy was going to grow above the trend, and we could even see the signs of acceleration.

However, now we have a question – how much higher may EUR/USD go? We haven’t seen that levels since May, 2016. And is European economy is really strong enough to support further currency appreciation?

Besides, we have Janet Yellen speech scheduled for tonight. And judging by the recent FOMC meeting, she is rather hawkish. And this may trigger the demand on USD.

It means that EUR/USD has little potential to  go above 1.1335, and current levels are very attractive for the selloff with the nearest target at 1.1290 followed by 1,1220.

Helen Rush,

Senior Analyst at Capital Markets

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