EUR/USD: The Week Ahead

Frankfurt (Dec 9)  Last week the euro started with a loss going to as low as $1.3525 on Monday. After that it gained strength and finished the week at the highest level for the last month ($1.3702), marking a gain for the week of 0.85%. The move was partially a result of Mr. Draghi's, speech at which he said the rates could stay low but he seemed reluctant to provide more stimulus for the European economy at the moment.

The $1.37 level is crucial for the single currency - a level at which it was stopped in February, 2013. It is also just at the 76.4 Fibonacci retracement level of the rise of the U.S. dollar from $1.3831 to $1.3299 - the last significant increase of the American currency.

Technically speaking, on the daily graph it seems that the euro does not lack the strength to surpass this resistance line and start chasing the previous high of around $1.38. The longer term moving averages (shown on the graph below) are still euro positive so the main up trend of the euro seems intact.