15, May 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

Euro returned its position on Monday in Asia, yesterday EUR/USD rose above 1.3000 and fell by the end of the day.

The euro/dollar rose against the weakening U.S. currency. The growth of this pair triggered stop-buy orders closing above 1.3000, but the single currency has the chance to face additional challenges in the short term, as the European Central Bank remains focused on easing cycle.

In fact, the ECB President Mario Draghi continued to support the idea of buying securities backed by assets, as the GDP report is expected to show a decline of the economy more than 0.1% in the first quarter, while a member of the Board of Governors of Ignacio Light said negative interest rates in the euro area can be "effective", while the economic downturn threatens price stability.

At the same time, a former board member of the ECB's Lorenzo Bini Smaghi said that Italy should go to the European Stability Mechanism (ESM), and "to use the funds to recapitalize the banking system," in light of the ongoing crisis in the periphery of the country and we can see that the government, acting within the currency of the Union increasingly rely on external support to bring their house in order.

However, there are reports that the German Finance Minister Wolfgang Schaeuble opposed the implementation of the ECB's non-standard measures and the Board of Governors may take place in the context of growing criticism as president of the dredge continues to insist on monetary policy in uncharted territory.

EU finance ministers prepared to meet in Brussels, which could support the euro in the next 24 hours of trading, but we can see that the EU has made another attempt to buy more time.