The EURUSD strength after the FOMC sounded less hawkish is running out of steam. The consolidation of EURUSD in the first week of April shows the market has digested this new policy line from the Fed - consolidation above recent highs.
The future direction now depends on who moves next? France and Italy are showing weakness in consumption and that is too significant for Draghi to ignore. He has set a precedent of trying to weaken the Euro at each opportunity. To not continue this easy money policy in the face of continued GDP risk will surprise the market and send the Euro much higher given the recent easy talk from the Fed.
Therefore I expect the ECB to give a strong message they are still willing to do everything to bring keep the currency low.
If the EURUSD breaks 1.134 tomorrow then I am looking for a 1.122 target.
The future direction now depends on who moves next? France and Italy are showing weakness in consumption and that is too significant for Draghi to ignore. He has set a precedent of trying to weaken the Euro at each opportunity. To not continue this easy money policy in the face of continued GDP risk will surprise the market and send the Euro much higher given the recent easy talk from the Fed.
Therefore I expect the ECB to give a strong message they are still willing to do everything to bring keep the currency low.
If the EURUSD breaks 1.134 tomorrow then I am looking for a 1.122 target.