FX News - Mar 17 2014: EUR/USD Opens EU Session on Low Note

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The EUR/USD opened today’s London session on a weak note, dropping under the 1.3885 area. There was no apparent reason for the pair’s decline, although it managed to return to the 1.3900 zone soon after. It was pulled back again, however, when the European Union released the region’s Consumer Price Index (CPI) and CPI Core.

The CPI came out lower than expected with the 12-month figure going up just by 0.7% (versus 0.8% expected), while the monthly change was only up by 0.3% (versus 0.4% expected). Meanwhile, the Core CPI was up by 1.0%, higher than the previous 0.8%. These data led to another decline in the EUR/USD pair, which bottomed out at 1.3885. It is making a slow comeback again, and is currently trading at 1.3896, with initial resistance seen at 1.3971, followed by 1.4006. Meanwhile, initial support is at 1.3881, followed by 1.3846.

In general, however, the sentiment towards the EUR remains positive, with some analysts predicting that the pair would hit the 1.4000 zone this week.

Meanwhile in the Pacific, the AUD/USD pair hit a 4-day high today, peaking at 0.9086, after opening the Asian session at 0.9029. The pair only soared higher as the day progressed, and it shows no signs of stopping as of the moment.

Earlier today, Westpac revised its view of further rate cuts from the Reserve Bank of Australia (RBA). They now expect the RBA to start raising rates by the second half of 2015. The rate is currently at 2.5%.

The AUD/USD pair is currently trading at 0.9082, with initial resistance seen at 0.9040, followed by 0.9062. Meanwhile, initial support is at 0.8983, followed by 0.8960.

By FX Strategy Team, Published on 17th of March 2014
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