The euro favoured by a good financial climate is very optimistic, it is about to overcome the key level of 1.35. The fact that this level is broken, as if markets were told that that the next target is 1.40, is very likely to happen if the Fed continues to feed, as now, 80 billion dollars a month. On the other hand, if the Fed puts a limit to this action to stimulate the economy, it is likely that the euro will get straight back to 1.30. This afternoon US session will be crucial for the long-term prospect of the euro. According to technical indicators, this pair is overbought and in the coming days we expect a downward correction to the 1.34 support level and further down to 1.33.
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