EUR/USD climbs to 1.1340

FXStreet (Edinburgh) - The bid tone is now accelerating around the European currency, with EUR/USD advances to session highs near 1.1340.

EUR/USD extends the drop post-FOMC

The pair remains in ‘recovery mode’ following overnight troughs around 1.1260, after the FOMC statement gave extra impulse to the greenback. Today’s upside in the EUR comes despite the German inflation figures missed expectations for the current month and US Initial Claims posted a 15-year low in the past week, decreasing to 265K. Next of relevance for the single currency will be the critical preliminary CPI results in the euro bloc due tomorrow.

Following the positive prints from the EMU’s M3 Money Supply and Private Loans, ECB’s P.Praet argued that the region has reached a ‘turning point’ in money and credit and added that consumer prices in the bloc will still head southwards although a reverting point could emerge in the third quarter.

EUR/USD levels to consider

The pair is now advancing 0.43% at 1.1338 with the next resistance at 1.1384 (high Jan.28) followed by 1.1412 (10-d MA) and then 1.1423 (high Jan.27). On the flip side, a breakdown of 1.1260 (50% of 1.1098-1.1423) would target 1.1222 (61.8% of 1.1098-1.1423) en route to 1.1098 (11-year low jan.26).

Fed rate hike still in pipeline –Hilsenrath

Wall Street Journal’s Fed watcher Jon Hilsenrath writes the Federal Reserve is still on course to raise interest rates as new hints of “hawkish” and “dovish” leanings seem to balance out.
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