FXstreet.com (Barcelona) - EUR/USD has reached a fresh monthly high at 1.3470 after an strong pullback from 1.3260 following the Trichet announcement to start a buying bonds plan. Currently, the pair is trading around 1.3410/20, 0.90% above today's opening price.
According to Valeria Bednarik, EUR/USD has been fueled by Trichet's words: Trichet's announcement of quantitative easing in the Euro zone, send the pair to test the 1.3440 resistance zone, a probable triple roof, in the hourly chart. Indicators are pointing for further gains in the pair, so watch for a confirmation above that level. Base of the formation around 1.3240 seems to far to be tested in the next hours. Support levels: 1.3400 1.3345 1.3310. Resistance levels: 1.3440 1.3482 1.3520 .
The UniCredit Research Team comments that ECB to buy covered bonds is a good news: As expected, the ECB cut the refi rate by 25bp bringing it to the historical low of 1%, narrowed again the corridor to +/-75bp and extended the maturity of unlimited funding to banks up to 12 months. However, the very good news is that Trichet announced they are ready to embark on an asset purchase program that will contemplate buying covered bonds. Details of the plan will be made public at the June meeting. The curve steepened on Trichet's words and the EUR-USD moved above 1.34.
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