28 Jun 2013
Flash: EUR/USD has bearish bias ahead - BTMU
FXstreet.com (Barcelona) - Bank of Tokyo Mitsubishi UFJ analysts believe that EUR/USD has a bearish bias ahead and will move between the range of 1.2800-1.3250.
They begin by noting that the euro is expected to lose further ground against the US dollar next week after EUR/USD broke below support from its 200-day moving average at 1.3075. They see that the main focus in the week ahead for the euro will be the upcoming ECB monetary policy meeting. They do not expect that the ECB will change their monetary policy stance.
However, they feel that it appears likely that President Draghi will emphasize that an exit from loose monetary policy remains “distant” actively attempting to dampen rising Eurozone short rates. They write, “final PMI surveys for June are expected to confirm that the pace of recession continues to ease in the Eurozone, but the economy is still not strong enough to deal with higher rates and a stronger euro.” Additionally, they believe that US dollar direction will be dictated by the release of the non-farm payroll report at the end of next week. They write, “ The US dollar will likely remain supported by Fed QE tapering expectations in the near-term unless the NFP report reveals a further slowdown in employment growth.”
They begin by noting that the euro is expected to lose further ground against the US dollar next week after EUR/USD broke below support from its 200-day moving average at 1.3075. They see that the main focus in the week ahead for the euro will be the upcoming ECB monetary policy meeting. They do not expect that the ECB will change their monetary policy stance.
However, they feel that it appears likely that President Draghi will emphasize that an exit from loose monetary policy remains “distant” actively attempting to dampen rising Eurozone short rates. They write, “final PMI surveys for June are expected to confirm that the pace of recession continues to ease in the Eurozone, but the economy is still not strong enough to deal with higher rates and a stronger euro.” Additionally, they believe that US dollar direction will be dictated by the release of the non-farm payroll report at the end of next week. They write, “ The US dollar will likely remain supported by Fed QE tapering expectations in the near-term unless the NFP report reveals a further slowdown in employment growth.”