Dovish FOMC minutes triggered a breakout for the Single currency to go past 1.15. Now with it hovering around 1.1514 handle, the pair patiently waits for the ECB minutes due later today at 6 pm IST. Hawkish minutes will further raise the hopes of 1.16 with an eye on the slowing of global economy at large. The signs of global slowdown were indicated right after the Fed raised rate as the US short term yield curve briefly inverted. Apple Inc added to that and its forecast of a slowing quarter struck the equity markets across the globe.
Yesterday the Eurozone unemployment data from the Euro zone indicated a lowered rate at 7.9 percent compared to an expected 8.1 percent. Coming week is heavy on the economic indicators with November Industrial production data and trade balance data. Following which Core CPI for December and the current account are due. A weak industrial data will likely take the Euro back towards 1.145 as the economy heads for a contraction in third quarter.
Technically this breakout beyond 1.15 may take the pair to touch 1.16 briefly. But a pullback towards 1.1450 is likely to happen sooner than later before it heads back for more dollar weakness. Seeing the Fibonacci retracement levels from a high of 1.18151 on Sept 24 to 1.12127 on Nov 12 last year, 50% stands at 1.15290 while 61.8% and 38.2% are at 1.1601 and 1.1457 respectively.