EUR/USD analysis: ECB´s Nowotny considering reducing QE "significantly"

Valeria Bednarik FXStreet

EUR/USD Current price: 1.2352

Hopes about the end of ECB's QE gave the common currency a lift.
EUR/USD poised to retest the strong resistance area around 1.2410.

Having traded uneventfully ever since the week started, the EUR/USD pair got a surprise boost this Tuesday from an ECB member, as Nowotny, a member of the Governing Council, said that, while the current bond-purchase program is set to continue until September this year, adding that "we will have to decide in summer what happens next." Furthermore, he said that if the conditions grant it, "we will have the possibility to reduce this programme significantly and head towards an end of the programme.” The EUR/USD pair jumped to 1.2377, holding now around 1.2350 ahead of the US opening. There were no major news coming from the EU, while the US published its March PPI, up 0.3% MoM and 3.0% YoY, well above market's expectations, yet not enough to trigger dollar's demand. The macroeconomic calendar has nothing more of relevance to offer today.

Technically, the pair's 4 hours chart shows that it has managed to surpass all of its moving averages, but with the 20 SMA gaining upward traction well below the 100 and 200 SMA, both still directionless and confined to a tight range. Also, technical indicators have accelerated higher, maintaining their bullish slopes at monthly highs and near overbought readings, indicating that the rally could continue, up to the 1.2410 region on a break above the mentioned daily high.

Support levels: 1.2335 1.2300 1.2250

Resistance levels: 1.2380 1.2410 1.2440

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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