1Finance

The EUR/USD soared to a near term high at 1.0808 after the release of inflation data and strong comments from Mario Draghi on Thursday. USD outlook has become more balanced which is likely to drive near‐term USD weakness but over the medium term the USD should still be supported. The DXY USD index is flirting with a break below its 50‐day MA, a level it hasn’t traded through since July, accordingly technically the USD index is shifting and a close below here today would be important. The fundamental side has likely caught up to the data surprises, which have continued to be disappointing for the US.

The euro is stronger, having rallied back above 1.08 and moving towards its 50‐day MA. Fundamental data was essentially as expected with inflation in line with the flash estimate. Greece continues to be a core focus, with April 24th’s Euro‐Area meetings particularly important. German and French yields continue to fall, driving an increased focus on the risks around bond scarcity for the ECB QE program.



Data released this week showed the Eurozone is fighting its way out of deflation, as prices rose for the second month straight, easing fears it could enter into a prolonged period of price falls. The single currency area’s annual inflation rate rose to -0.1 per cent in March, up from -0.3 per cent a month earlier, according to its official statistics agency. This was in line with analysts’ expectations.

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