After a high of 14 months beyond USD 1.37, Euro fell in the face of political uncertainty in Italy and Spain and concerns of European leaders.

While the transalpine peninsula observed with utmost attention progress of Silvio Berlusconi in the polls for elections scheduled for February 23 and 24, Spain is at the heart of a corruption scandal involving the Prime Minister Mariano Rajoy, what call into question appeasement in bond markets.

On the other hand, the recent rise of the Euro is not without consequences on the economy of the Old Continent and statements against the force of the single currency multiply. The French president François Hollande has called for an exchange rate policy while Angela Merkel is worried about monetary policy being conducted by Japan.

In the meantime, Mario Draghi reiterated that the level of the euro was not an objective of monetary policy; however, he discussed the impact of the Euro on the level of inflation whereas the ECB is the guarantor of price stability. He implicitly binds the evolution of the euro at the next decisions of the Board of Governors.

Graphically, the single currency has just ended the week below our USD 1.3376 short term support. Breaking this level in weekly closing price, it opens the way for a continuation of the movement towards 1.3248 where the Euro could find sufficient momentum to revive due to medium-term support and its trend line. We place a limit order to buy at 1.3250.