Early in March 2015, I predicted an uptrend of the Euro against the US Dollar, on the basis that the Dollar had risen too high. I sketched a rebound of EUR/USD potentially symmetrical to its previous downtrend (blue triangle). I offered the opinion that the Greek crisis would not prevent the rise of EUR/USD, because it was not about the Euro, but about the Dollar.
Then came better news of the American economy and talk of an imminent end to ZIRP, possibly as early as Sep 2015. Rising American interest rate, while Euro clings to ZIRP would kill the EUR/USD rebound.
All eyes were on Janet Yellen yesterday, with the expectation that interest rate rise would be indicated from September. Instead, she indicated a continuance of Zero interest rate for the present. As a result, EUR/USD spiked.
However, in Europe the Financial Ministers meet today again with no end in sight to the Greek crisis. Today should see a reversal of yesterday's spike, even if temporary.
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