NEW YORK (Forex News Now) – The Euro has found a bid in online FX trading this morning, even though the ECB has decided against a rate change, signaling at least contentment with the present situation with the common currency. The ECB chose to hold rates today, at 1:45 PM GMT, and will have a statement 45 minutes later.
Even with the lack of a rate hike, the Euro has been bid up, mainly as a result of U.S. dollar weakness, and not Euro strength as the Federal Reserve set upon another round of quantitative easing.
The Euro will be the major beneficiary to this round of Dollar weakness, as it is the single most traded currency pair in online FX trading. The pair normally functions as a “Pro-Dollar or Anti-Dollar” barometer, meaning that the single biggest driver of this pair quite often is simply trader sentiment regarding the U.S. dollar.
The statement will certainly be followed as well, but with the bank’s recent statements, it appears that Europe has no interest in printing money at the moment. Because of this, the pair should see a bid in online FX trading.
Looking at the charts, you can see that the pair has broken out above the recent 1.40 resistance area, and has already pierced the 1.42 handle. It appears that the pair has its site set for at least 1.45 and possibly higher as the Dollar will be sold off relentlessly over the next few months, barring any major financial disasters or shocks to the system.
The three red arrows all point out the same thing: Resistance in the form of “Shooting stars” on the daily charts. The fact that there were three at the same area shows just how significant the area really was. This is a very, very bullish signal for the Euro, and until shown otherwise, it must be thought of as a “buy on the dips” situation in the pair.