Euro: $1.4000 resistance holds
Euro tried to extend the February rally in early March, but faced resistance at $1.3966 (Mar. 13 high) and retraced below the $1.3800 figure. Buyers failed to fix above the bearish monthly Ichimoku (upper boarder at $1.3955) and the 2008/14 trend line resistance (around $1.3870).
Central banks played the leading role in March EUR/USD movements. ECB supported the euro on Mar. 6 meeting by not easing monetary policy. The regulator also upgraded the 2014 GDP growth forecast by 0.1% to 1.2%. However, the bullish euphoria was short-lived: Fed’s chief Janet Yellen pulled the pair down on Mar. 19. She hinted on sooner-than-expected US rate hikes.
EUR/USD has now a snow ball's chance in hell of overcoming the $1.4000 mark. US released pretty strong data in March; the picture is expected to improve further in April: negative impact of the untypical weather conditions is likely to end soon. ECB officials are also pouring oil on the fire, referring to the overvalued euro.
We don’t see any feasible reasons for a sharp drop in euro, but expect the pair to trade in a sideways channel with a bearish tendency in the coming weeks.
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