Related: International ETFs: Currency Story Hasn’t Changed
Coming into this year, some market observers predicted the euro would not weaken against the U.S. dollar as much as was seen in the previous two years. The U.S. dollar has previously been strengthening on the prospect of a tighter monetary policy, which would help remove some of the excess liquidity sloshing around in the economy.
Should monetary policy in the U.S. surprise, further diverging from the ECB and the Fed hikes rates, the exchange value of the U.S. dollar will strengthen, or foreign currencies will depreciate relative to the greenback.
“The euro’s 20 day Simple Moving Average (SMA) was a previous point of resistance and is now providing support. The 20 day SMA is also above the 50 day SMA, another bullish sign. Resistance will be found near the 1.145 level, reached right before the European Union referendum. 14 day RSI is a neutral to bullish 57.90,” adds OptionsExpress.
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