EURUSD could face some headwinds through the round figure 1.2000

As expected, the EURUSD pair continued to move higher due to dollar weakness that was carried over from Friday. This weakness in the dollar has been due to the failure of Yellen to address monetary policy during her speech on Friday and also due to the fact that Draghi also did not choose the address to talk anything about the strong euro in his speech as well. In the past, European officials have been known to talk down the Euro if they see it appreciating too much.

EURUSD H1

Draghi also spoke about the strong eurozone economy was taken as a hawkish signal by the traders who have bought the EURUSD pair heavily since then. This has helped the pair to rise through 1.19 and it now sits just below the short term target of 1.20. There could be some headwinds as the pair moves towards the 1.20 region as it is a round figure and hence a lot of sell orders maybe sitting there at the moment.

But if the pair does manage to go above that region, we can expect a smooth path towards 1.25 in the medium term. The London markets have not got a chance to react to the speeches from Yellen and Draghi as yet and so it would be interesting to see how they react when they open today.

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