The EUR/USD broke below the 1.4000 level and hit the 1.3944 low so far. The European Central Bank President Jean-Claude Trichet claimed that a ‘downside risk’ to the EU economy is possible and that the interest rate will most likely remain the same. Trichet added, inflation in the Eurozone has paused for the moment.

EUR/USD broke the 1.4495 minor resistance line and reached the 1.4550 high. Intraday bias has changed to the upside, as long as the 1.4100 minor support line is not broken. On the upside, the currency pair reversed its bearish sentiment to bullish bias after the Greek parliament voted to pass the austerity measures.

The Euro dropped almost 300 pips from 1.3859 to 1.3543 against the US dollar last week when European Central Bank President Jean-Claude Trichet said inflation risks are “broadly balanced,” dimming the prospect of an increase in interest rates. The comments on the inflation outlook disappointed investors who were betting on euro zone interest rates would rise ahead of those in the US.

The euro continues to show some weakness against its major peers like the dollar and yen as concerns that some of the euro zone nations may dump the use of the currency build up. The European Central Bank, as we know, cannot extend its hand solely to a single country since it was tasked to monitor and regulate the financial system of the entire euro zone.