EUR/USD Going For Negative Close as Weber Steps Down

ECB member Axel Weber’s resignation has been confirmed – Weber was a candidate to replace Trichet, and a highly  respected  central banker. His loss is a loss for the Euro, which aims to break support, on this news and other troubles. Update.

Not only Mubarak steps down in Egypt. After rumors have circulated throughout the week, it is now confirmed that the head of the Bundesbank, Axel Weber, tendered his resignation. Weber already announced his decision to German Chancellor Angela Merkel on Tuesday, and now it was confirmed.

Weber was a leading candidate to replace current ECB president Jean-Claude Trichet when the latter ends his terms later this year. Weber is a highly regarded central banker, that had hawkish views. He opposed Trichet’s policy for buying bonds, and supported a return to “normal” policy – raising the rates.

EUR/USD fell to 1.3497, below the past week’s lowest level of 1.3506. 1.3510 is a minor level of support. The break below this level still isn’t confirmed. Stronger resistance appears at 1.3440. Resistance is at 1.3570. For more technical levels, see the EUR USD forecast.

More pressures on EUR/USD

Weber’s resignation isn’t the only reason behind the drop in EUR/USD. In the European front, the debt crisis is far from over, with elections in Ireland, talks of restructuring in Greece and soaring bond yields in Portugal.

In the US,  no surprises were seen today in trade balance and consumer sentiment, but yesterday’s drop in jobless claims shows a significant improvement in the economy’s most painful spot – employment.