Will Reality Prevent Further EURUSD Gains?

With the Dow Jones Futures recording an increase of 85 points overnight, the EURUSD pushed higher within its uptrend channel and is currently registering 1.4750 - see chart.

All dips so far have just been retracements providing investors with better buying opportunities. A sustain break below the channel’s lower trendline is required for the creation of any significant reversal.

The ECB has left its Interest Rate at 1.00% expressing concerns that the strong Euro could have a negative impact on its zone’s economic growth rate. As such, this rate is expected to remain unchanged until the first quarter of 2010.

The Bank of England has also held its rate at 0.50% resulting in the GBPUSD extending it recent rally to 1.6075.

With many economists predicting an anemic US growth through to 2011, the correlated Dow Jones and EURUSD may have difficulty sustaining their recent bull runs. This is especially so since the US consumer has left the party.