EUR/USD sits at 1.3005, not a million miles from where Europe opened, in what has been a rather inconclusive start to the week’s trading in Europe.
A number of factors continue to weigh on the pairing, but as we’ve seen before there is evident caution of pushing the downside too agressively around current levels.
The USD continues to benefit from safe haven flows, bolstered by ongoing uncertainty surrounding the results of stress tests on 19 US banks. The results are scheduled for release early May.
The euro meanwhile remains weighed down by expectations of an ECB rate trim and announcement of quantitative ease at the next ECB meet on May 7. But it has to be said these probabilities must be a fair amount discounted by now.
Some also point to apparent divisions among ECB members over policy as a fairly big negative.
European stocks are off to a shakey start, and although the correlation between forex and stocks has become a little hazy of late, that won’t be helping EUR/USD any.
Technical supports down at 1.2965/70 and 1.2945, while resistances seen at 1.3015/20 and 1.3045/50.