The EUR/USD rallied strongly during the week and rose from Monday’s low to Thursday’s high, 335 pips. “Some consolidation may now be the case, but his week’s rally has at least created a more solid floor, which should in turn make a break below 1.40 less probable,” wrote Roberto Mialich, analyst at UniCredit Bank in Milan. According to him, a solution to the US debt ceiling problem should likely favor EUR/USD because of a positive response by Wall Street. “ Thus, provided risk stays on, our target of 1.46 for 3Q11 may be reached earlier than we had anticipated.” The EUR/USD is retreating from 1.4440, moving further away from 2-week highs and trimming part of yesterday's gains. The pair is pulling back below 1.4400 and recently broke below 1.4375 and fell to 1.4360, reaching a fresh daily low. "The European shared currency snapped its earlier advance after lower-than-expected German report while the US dollar rebounded on hopes debt ceiling problem would be resolved.
At the moment, the pair is trading barely above session lows, posting the first daily decline since the beginning of the week.
