EURUSD: Euro plunges to nine-year low vs. the greenback
The single currency fell to 1.1860 vs. the greenback in early hours of Asian session on Monday, printing a nine-year low amid speculation that the European Central Bank is getting closer to starting large-scale QE program like the US, UK and Japanese central banks have done in recent times. On top of that, the German government believe that the Eurozone would now be able to cope with a Greece exit if that proved to be necessary, reported by Der Spiegel on Saturday.
A correction is certainly underway but the upside should stay limited as traders are happy to continue selling any bounces that were seen in recent weeks.
As its first policy meeting of the year approaches, the ECB is now under strong pressure to ease its policy as soon as January 22, while the FED prepares to raise interest rates from a record low near zero.
Two major market participants Citigroup and Barclays are now predicting a rate for end-2015 at 1.07, a level not seen since April 2003.
Technically speaking the pair found resistance at 1.1980. As this week is filled with major fundamental news, most forecasts are against the euro, closing and staying over the gap at 1.20 seems to be an unlikely scenario. Take a closer look at the markets on Wednesday as the Eurozone will announce its Unemployment rate together with its CPI. Unemployment data will also come on the same day from Germany followed by FOMC Minutes later that day and of course Friday’s NFP numbers.