EUR/USD eased down from the 1.1375 area. The minutes of the European Central Bank’s January meeting showed that some policymakers believe that the ECB should act rather sooner than later because of the new risks to economic growth and inflation. The regulator’s president Mario Draghi also underlined the central bank’s readiness to ease policy in March. Yet, the market players don’t seem very convinced that the ECB’s efforts will work, and we see that the euro’s decline is gradual, not abrupt.
Resistance at 1.1250 will likely guard the upside. Important support is in the 1.1050/40 area (200-day MA, 55-week MA). If this support is broken, the single currency will fall to 1.0960/00 and even 1.0800.
On Monday the euro area will release flash manufacturing and services indexes. On Tuesday watch German Ifo business climate. The region’s final inflation figures will come out on Thursday, while German preliminary CPI is due on Friday.