08, May 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The euro fell to an intraday low on Monday after Mario Draghi said that the central bank would closely study the eurozone economic data and they are ready to take action to support the economy of the region if it is needed.

On Thursday ECB lowered its refinancing rate by 25 basis points, to a minimum level of 0.50% in an attempt to help to ease the euro zone economy out of recession.

The European single currency hit an intraday low 1.3052 U.S. dollars, down from 1.3110 level.

In March, retail sales in the eurozone fell by 2.4% y/y vs. previous 1.7% and the forecast -1.9%.

Draghi's promise to take additional measures to support the economy in the euro zone if needed is "a definite shift in the policy of "the ECB, which is likely to result in a decline in the euro", said Omer Esiner, analytic at Commonwealth Securities. According to Esiner, the euro/dollar breakthrough below 1.3070 is important from a technical point of view as it allows to test the April maximum at 1.2740.