Euro Confronts Pressure From All Sides
Today’s Spotlight Market
Greece hasn?t been in the financial news as much as in 2015, but negotiations are continuing between Greece, Eurozone finance ministers, and the International Monetary Fund. Although the framework of a deal was reached last year, the specifics of the Greek pension cuts and tax increases have still not been agreed upon. However, the tone from Germany has changed; there is no more talk of Greece leaving the Eurozone.
Fundamentals
The European Central Bank continued an aggressive stimulus policy during their meeting on March 10. The ECB is using negative interest rates of -.04% as well as an increased program of bond buying for quantitative easing, increasing to 80 billion Euros per month. The ECB also drastically cut their inflation forecast for 2016 to 0.1% from 1.0%. Eurozone growth is predicted to be a weak 1.4% for 2016, 1.7% for 2017, and 1.9% for 2018. The ECB decided against implementing a tiered deposit rate. The Bank of Japan implemented such a program in January.
Technical Notes? -? View Today’s Chart
Turning to the six month continuation chart, we see several bullish signs for the Euro. Current trading is pushing up against the 1.1500 resistance level last tested in October. The 20 day Simple Moving Average (SMA) is providing support and the Euro contract is trading above both the 20 and 50 day SMAs. 14 day Relative Strength Index (RSI) is approaching overbought at 70.93.
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