Market Trend is back to bullish (6) after yesterday’s Neutral (3) -with a long around the 1.4477 level and stop loss at 1.4264. The could possibly be targeting 1.4550 (we expect resistance in the 1.4538-1.4600 region) within the day before some correction sets in - the pair is currently trading at 1.4505 and for the day has traded in the range of 1.4454-1.4520.

On a daily time frame the EUR/USD currency pair is overbought on the RSI, while on the 4-hourly charts it is nearly in overbought territory.

The pair hit new highs at 1.4520 soon after comments from an ECB Governing council member Luc Coene suggested that last Thursday’s 25bp hike could not be an “isolated decision”.

At the time of writing we are awaiting Advanced Retail Sales and Business inventories data from the US.

The USD finds itself pressured by the US debt situation highlighted by last week’s just in time avoidance of a government shutdown and today’s IMF debt warning to the US and encourages fiscal adjustment “..sooner rather than later”.

We expect the USD to remain pressured while the Federal Reserve remains accommodative in its monetary policy.