EUR/USD remains near 1.0200

Source: Dukascopy Bank SA


As the European Central Bank hiked interest rates more than expected, the Euro surged and immediately tested the 1.0270/1.0280 zone. However, the bank revealed a new central bank tool, which in essence is another way of doing quantitative easing. Namely, the bank initially revealed that it would tighten the supply of the Euro via a 0.5% interest rate and then everyone read into the released documents about the new program and found out that they will simultaneously create money via bond buying.

In general, the situation has not changed, the ECB is not properly tightening monetary policy, increasing the value of the Euro and decreasing inflation in Europe. Due to that reason, the EUR/USD still traded near 1.0200 on Friday morning.

In regards to the near term future, a potential surge of the Euro against the US Dollar would have to reach above the 1.0.270/1.0280 zone, prior to testing the 1.0300 mark.

On the other hand, a decline is expected to find support in the July 20 and 21 low levels at 1.0153. Further below, note the 200-hour simple moving average and the 1.0100 level.
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