6 Sep 2013
Flash: What lies ahead of EUR/USD? – Danske Bank and Commerzbank
FXstreet.com (Edinburgh) -The demand for the shared currency remains subdued on Friday, with the EUR/USD alternating gains and losses and hovering over 1.3120/30 after yesterday steep slide on an unexpectedly dovish press conference by ECB’s Mario Draghi.
According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair “has eroded its 200 day ma at 1.3148 and sold off to its 50% retracement at 1.3104. Intraday charts are still indicating that we should allow for a rally of no more than 1.3175/1.3220 ahead of further losses”. The expert looks for a decline to both retracement levels at 1.3020 and 1.2904 (61.8% and 78.6% upside from July) ahead of 1.2755 (July low).
Against the backdrop of rising yields in the US money market and the likeliness of the Fed starting its QE taper in the present month, Analyst Sverre Holbek at Danske Bank assessed, “US money market curve has steepened significantly recently. Our interest rate strategists still look for at near-term flattening, which potentially could trigger a 1-2 figure correction higher in EUR/USD… However, with a dovish ECB and the Fed starting to taper, risks admittedly seem to tilt more and more to the downside”.
According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair “has eroded its 200 day ma at 1.3148 and sold off to its 50% retracement at 1.3104. Intraday charts are still indicating that we should allow for a rally of no more than 1.3175/1.3220 ahead of further losses”. The expert looks for a decline to both retracement levels at 1.3020 and 1.2904 (61.8% and 78.6% upside from July) ahead of 1.2755 (July low).
Against the backdrop of rising yields in the US money market and the likeliness of the Fed starting its QE taper in the present month, Analyst Sverre Holbek at Danske Bank assessed, “US money market curve has steepened significantly recently. Our interest rate strategists still look for at near-term flattening, which potentially could trigger a 1-2 figure correction higher in EUR/USD… However, with a dovish ECB and the Fed starting to taper, risks admittedly seem to tilt more and more to the downside”.