EUR-Crosses Face Test as Draghi Warns on Strength: EUR/USD, EUR/JPY

DailyFX

Talking Points:

- EURUSD gaps open lower after choice Draghi commentary. .

- EURAUD and EURJPY levels to watch on further weakness.

- Forex economic calendar sees US Advance Retail Sales on Monday.

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The Euro proved surprisingly strong last week, serving as the "anti-US Dollar" in the wake of the weaker than expected US Nonfarm Payrolls report for March. Yet the Euro's own central bank problem remains: the desire by ECB President Draghi to see a weaker exchange rate.

Such was made clear this weekend, when President Draghi said "The strengthening of the exchange rate would require further monetary policy accommodation. If you want policy to remain as accommodative as now, a further strengthening of the exchange rate would require further stimulus."

While the most notable action has been in EURUSD - the pair gapped open lower through the intraweek rising trendline from the post-NFP low - there may be other opportunities unfolding in EURAUD (continuation in descending channel) and EURJPY (breakdown out of triangle, trend from November 2012).

Read more: Euro Elevation versus Dollar Isolated as ECB QE Threat Remains

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX


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