In the last 24 hours the EURUSD has surged higher off support at the key 1.13 level after having fallen strongly over the last few weeks. It had reversed from a two week high above 1.16 and started its decline back to the key level of 1.15 before continuing lower. You would likely expect the 1.15 level to provide some resistance should the EURUSD continue to rally higher. Only several weeks earlier the EURUSD fell strongly from multi month highs above 1.18 down to the key support level at 1.15. It also reversed strongly and rallied back above the 1.15 level several weeks ago. The 1.17 has posed significant resistance as expected and likewise the 1.15 level has now provided support on several occasions.
In the second half of August the EURUSD rallied strongly as it recovered from a 12 month low at 1.13. The 1.15 level had done a solid job of supporting the currency pair in the last few months, so it is equally significant that it has been able to rally higher. For the last five months the 1.17 level has become key as the EURUSD has often responded to it and in most cases it has pushed the currency pair lower. In early June the EURUSD rallied well and moved back above 1.18 before it experienced a sharp drop down to a near 12 month low just above 1.15. The 1.17 level has been significant previously providing a measure of support late last year, so it should come as no surprise that it has provided some resistance to the EURUSD and is now an area of interest.
Throughout May, the EURUSD was sold off strongly forcing it down through the well established support level at 1.22 and then 1.17 down to close to a one year low near 1.15. Since the middle of last year the 1.17 level had propped up the EURUSD several times. Despite being some distance away, the 1.22 level now may provide some measure of resistance and EURUSD buyers around 1.22 will be keen to offload their long positions should the EURUSD return to close to this level.
The European Central Bank (ECB) has reaffirmed that it is on track to wrap up its 2.5 trillion euro stimulus program by the end of the year, despite a possible disorderly Brexit, risks from trade protectionism and Italian populist policies.At its recent meeting in Frankfurt, Germany the central bank left its key interest rates unchanged and confirmed the end-date for its stimulus program.The European economy has slowed due to several factors including the possibility that Britain might leave the European Union (EU) without an exit deal in March 2019.Currently the ECB buys 15 billion euros a month as part of its stimulus program, in order to lower borrowing rates and help the economy. It has stated that it will keep interest rates at record lows at least “through the summer” of 2019.Despite ongoing concerns, ECB President Mario Draghi said it “would really take an extraordinary amount of lack of preparation” for Britain to fall out of the EU without a deal. No final deal has been reached as talks between the British government and the EU remain difficult.Looking at the economy, Mr Draghi said, "Risks surrounding the euro area growth outlook can still be assessed as broadly balanced.At the same time, risks relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent."