Forex: Euro surges versus US dollar on ECB lending to highest level in over a month

By CountingPips.com

The European common currency has surged higher in forex trading today against the US dollar and the other major currencies following the better than expected European Central Bank (ECB) lending program. The ECB announced today that it will lend 78 commercial banks a total of €111.2 billion for six days at a rate of 1 percent. Today was also the day that banks needed to repay the ECB €442 billion in 12-month loans from last year and the six-day loan results showed that many banks were in good position to repay their outstanding loans.

Today’s results were not as bad as many analysts had feared and quickly boosted the euro to higher levels against the dollar, Japanese yen, British pound, Swiss franc, New Zealand dollar, Australian dollar and the Canadian dollar.

The EUR/USD currency pair has touched a high point of 1.2474 so far in today’s forex market trading. This is the highest level the pair has reached since May 24th. The EUR/USD opened the day at 1.2228 and spiked sharply higher through many recent resistance levels on its way to almost 1.2500 and into overbought territory (RSI indicator) on the hourly time frame.

EUR/USD Hourly Chart