Unified European currency has declined against the USD on Thursday. On the four-hour chart the pair EUR/USD broke down the lower level of the ascending channel. If the downward impetus will be strong and the pair does not go back to the level of 1.3610, the decline will continue.
Analysts believe that one of the reasons causing decline in Euro is the plan to launch new anti-crisis program to refinance banks LTRO2 (Long Term Refinancing Operation). According to the member of ECB Ewald Nowota, discontinuation of stimulation will have a negative impact on the financial system. Officials want to avoid “cliff effect” in the stable flow of liquidity. Therefore, ECB seems to decide to take baton from US Fed and launch quantitative easing.
Support and resistance
On the daily chart the nearest resistance level is 1.3648. Support level is 1.3574.
It is recommended to open long positions after breakdown of the level of 1.3574 with the target of 1.3495 and protective orders near 1.3620.
Analysts of LiteForex Group of CompaniesPublication source