EUR/USD: Draghi comments are key

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European Central Bank President Mario Draghi continued to speak in Portugal for a second straight day. The ECB is having its annual conference in Portugal. Traders of the EUR/USD have been watching his comments closely as they are very market moving. As much as his remarks weighed on the Euro, the single bloc currency stayed steady against the greenback.

Support and Resistance

The major currency pair traded at a 5-day high when it hit 1.3643 in the late session in Asian trading. The EUR/USD continued its move upwards consolidating at 1.3654, up 0.06%. Support for the pair is likely to be found around 1.3590 and resistance is potentially at 1.3715.

Draghi comments

Draghi warned on Monday about a deflationary risk for the Euro zone economy. If inflation remains too low, the central bank is going to act swiftly. Draghi has stated that the ECB is looking at several policy options including liquidity injections and interest rate cuts. If inflation were to move into negative territory, then broad-based asset purchases might have to be made to prevent the recovery in the EU from deteriorating.

Stressed countries like Greece and Spain will have to be closely watched. If consumers and businesses decide to delay spending, there will be a major downturn in the Euro zone. So it’s important for EUR/USD traders to monitor inflation as this will dictate the next moves of the central bank.

Flurry of U.S. macro data

There will be a lot of data from the U.S. released today. In the late American session, we will see durable goods orders data out. Then house price inflation and consumer confidence will follow.

JUST IN: The Commerce Department reported that U.S. durable goods orders surged 0.8% in April

This has been a big surprise as estimates were for a 0.5% drop, following a 3.6% gain in March, whose figure was revised up from a formerly expected 2.9% increased.

Core durable goods orders, which exclude volatile transportation items, went up 0.1% in April, missing estimates for a 0.3% rise. Core durable goods orders in March were revised up to a 2.9% rise from a previously expected 2.4% gain.

Tuesday’s upbeat data made it almost certain that the U.S. Federal Reserve will keep tapering the bond buying this year as long as the recovery stays on track.

Fed stimulus tools like monthly asset purchases actually put downward pressure on the dollar by weighing on long-term interest rates. Investors then head to equities instead. is the place to be for binary options traders. We hope you liked our EUR/USD article. Sign up for the newsletter to get articles like this delivered to your mailbox.

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