EUR/USD continues marching to the upside and it is struggling with another high level of resistance, 1.1360. This was the high back in August.
Above this level, we are now at the highest since June 24th, the day after the EU Referendum. On that day, EUR/USD reached 1.1420, which is the next level of resistance. The pair reached a high of 1.1378 but continues struggling with the 1.1360 level. Lower support awaits at 1.13, the high of the US elections.
Why is EUR/USD rising?
- Draghi drive: The main reason for the rise of the euro is Draghi’s comments in Sintra yesterday. He talked about the end of deflation risks and hopes for reflation. In addition, he talked about gradually removing stimulus, a first taper talk. The ECB Vice President Vitor Constancio said Draghi´s speech is in line with the ECB’s thinking.
- Fed worries: While Yellen did not say anything in her highly anticipated speech, the Fed Chair did not stop the pair either. Her colleagues were a bit more skeptical: Harker and Williams expressed worries about inflation. Fed officials have expressed some worries about stock markets.
- Trumpcare fails for now: In US politics, the majority leader of the Senate, Mitch McConnell, announced that the vote on the healthcare bill will be postponed. So far, he failed in mustering a majority of senators to pass the bill. A failure on healthcare implies no progress on taxes, which markets want to see cut.
Here is the chart:Get the 5 most predictable currency pairs