EUR/USD Slipped As Greenback Became Stronger

This year started in a highly optimistic manner with some profits that came the US equity market’s way. The USD/JPY is more stabilized than in 2013, but the biggest concern is represented by the EUR/USD.

According to Realtime Forex, the market could fall to 1.3560 from below 1.3621, but if it breaks 1.3645, the market could reach the sky within seconds.

USD vs. Asian Stock

When the clock struck 12 and 2013 faded away, so did the USD/JPY’s five-year high level. Instead, it reached a rather healthy pullback thanks to the traders’ return which translated into a downturn from 105.44 to a satisfying 104.07, Realtime Forex reports. What’s more, Fxeeda was another source that commented on the imminent battle between the USD and the JPY, but the charts points in the same direction, namely healthy fallback.

According to Bloomberg News, the USD had big plans for the week that just passed, shown by the fact that it could compete and gain against the majority of its peers. Yesterday, the USD even reached a new high and even if the Labor Department is cautious and its unemployment rate cannot rise above the five-year low, the news is generally optimistic, whereas the yen continues to depreciate, Fxeeda, Realtime Forex and Bloomberg all show. The reason is Goldman Sachs Group Inc.’s forecast with regard to Japan’s currency; the giant gave JPY little to no chances to the JPY, stating that it will fall faster than it was previously estimated, Bloomberg reports.

EUR/USD

This week, the EUR/USD slipped again as the greenback continued to become stronger and taking into consideration that last week the dollar was considerably higher than the EUR thanks to its three consecutive days that closed above the EUR, the latter is walking cautiously.

More bad news came during this week for the euro, which slipped again yesterday afternoon; according to Realtime Forex, the speech of the European Central Bank’s president Mario Draghi had a rather negative impact on the EUR’s evolution. “The Government Council strongly emphasizes that it will maintain an accommodative stance of monetary policy for as long as possible”, said president Draghi. Therefore, the president only strengthened what investors already knew, namely the fact that the euro is not yet out of danger, a statement also highlighted by Fxeeda’s results, which unveil the euro’s weakness.

“It’s just a matter of time that the European Central Bank will introduce additional monetary easing amid disinflation”, forecasted Junichi Ishikawa, one of IG Markets Securities’ analysts in Tokyo. “I expect the euro to be sold this year”, he concludes. Economists surveyed by Bloomberg also bet on the fact that the euro will decline to $1.28 by December 31, 2014.