When nothing happens, EUR/USD goes up. That’s what we wrote last week. Growth is faster in the eurozone than in the US. The ECB is nearing an end of QE while there are initial signs of hesitation among the ranks of the Fed. And politics look very messy in the US after the Comey memo, as mainstream Macron took office.
And we can add another M to Macron, the memo and all the other mojo. It’s Merkel, the Chancellor of Germany. This time, it is not due to her lead in the polls ahead of the elections in September.
Merkel says the euro is too weak
Chancellor Angela Merkel directly addressed the euro and just said it is too weak. The weak exchange rate is a result of the ECB’s monetary policy and makes German products cheaper, according to Merkel. Her words are not a shocking observation, to say the least. However, coming from her mouth, it makes a difference.
Some call Merkel the Queen of Europe, and at least for today, she is the queen of the euro.
EUR/USD is trading at 1.1255, yet another 6-month high. At these levels, the pair is approaching the round 1.13 level. This is the swing high that the pair reached around the US elections on November 8-9 2016.
Above 1.13, we find 1.1360 and 1.1420. Will we reach these levels soon?
Here is the euro/dollar weekly chart, showing the rise. The uptrend channel has been left behind: we are trading above it.
More: EUR/USD: Underlying Trend Higher But Turning Neutral S/T; Where To Target? – BTMU