The Single currency soared to as high as $1.2460 this morning , trading above the 1.24 mark for the first time in more than 3 years, boosted from ongoing U.S dollar selling across the board.
The unabated U.S dollar weakness has intensified this week after comments from US Treasury Secretary Mnuchin from Davos saying that a weak USD was good for U.S trade.
Meanwhile, the Euro has kept on pushing higher this year on growing optimism that a strengthening Eurozone economy would prompt the ECB to begin unwinding the enormous stimulus program this year than previously forecasted.
Today, the ECB is due to announce its rate decision at 1245 GMT, followed by President Mario Draghi’s news conference at 1330 GMT. Any hawkish comment from Draghi could prompt another round of sell-off in the U.S dollar, while a dovish comment could see scope for a correction in the Euro.
On the daily chart, the rally on the EUR/USD to as high as $1.2450 this year has been quite impressive, gaining almost 20 % over a year, yet there is still scope for further gains to $1.2550/1.2650 in the short term. However, given the recent strength on the pair, ECB’s Draghi could try and talk down the EUR, and possibly send the pair lower!
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