EURUSD
Looking back on last week`s performance, the euro was hit by a strong dollar in the first three trading days, with the euro slowly falling and getting some support around 1.1300. Markets are mainly looking at the euro-zone interest rate resolution, which came out on Thursday. While the global slowdown in economic is gradually emerging, most investors are confident that the resolution will likely keep benchmark interest rates unchanged. But to investors` surprise, the ECB`s statement was more "dovish" than thought, sending the euro sharply lower in Thursday`s trading session, falling more than 130 points to a bottom of 1.1176. Then the speech by European Central Bank President Draghi released three important messages that put the euro under pressure, deepening the euro`s decline: first, the euro zone`s economic is weak, and the ECB will maintain current interest rates at least until the end of 2019. This is several months later than the market expected EBB to raise interest rates; Second, after the end of the last round of quantitative easing, only three months after the beginning of a two-year scheduled long-term refinancing operations in September, through the policy of cheap loans to banks to stimulate domestic economic; Its third euro zone GDP grew only slightly in the fourth quarter, 0.2 percent, well below the 0.4 percent increase in the first quarter and 0.4 percent in the second quarter. The ECB also cut its GDP growth forecast for the next two years across the board, from 1.7 percent to 1.1 percent in 2019 and 1.5 percent in 2020 from 1.7 percent to 1.5 percent. There are still significant downside risks for the euro, which may face another sell-off as risk averages build up, despite a modest recovery of more than 50 points after Friday`s "non-farm" meltdown in the United States. The euro zone economic data released this week also deserve investors` attention, with Germany`s January trade balance on Monday and inflation figures for February in the euro zone on Friday. The next support for the euro is likely to be around 1.12000, after the euro broke through that level, and if it falls below it again, it will drill down to the next important integer gate, 1.1100, while the drag position will be near Wednesday`s 1.1320 level.
Figure I: EURUSD-USD weekly K-chart
