RBS have updated foreign exchange traders with their perspective on the EUR USD rate.
The Euro Dollar exchange rate is currently at 1.3947 after hitting resistance at 1.4.
William Moore at RBS says that there are 3 things from a technical perspective at work that market participants need to be aware of:
"1.4050, due to the monthly charts, looks for the moment too high for the EUR. There are 2 support bands to be aware of that are continuing to catch dips they are between 1.3890/60 and 1.3745/70.
"Finally the USD index chart hangs on a knife edge which I think will determine the longer term direction of the USD Strategy: Less conviction than previous but prefer shorts over longs on a tight 70 pip stop up at 1.4050 targeting the 2 bands as highlighted above."
From a fundamental perspective, the Dollar rallied against the majority of the major currencies yesterday, as concerns grew over the radiation leak in Japan and a state of emergency was declared in Bahrain.
The political unrest sweeping through the Middle East and North Africa has taken a backseat following the earthquake last week, but investors are still concerned about the threat of civil war.
The U.S currency made gains against nine out of the 16 most actively traded currencies as global risk aversion stalked the market and stocks slid worldwide. The Euro ended three days of gains against the Dollar, after Moody's Investors Service downgraded Portugal, reviving concern about Europe's ability to resolve the sovereign debt crisis that has engulfed many peripheral economies.
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