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22 Feb 2013
Forex Flash: What lies ahead of EUR/USD? – BTMU, Commerzbank and UBS
The single currency remains glued to the area around 1.3210/15 on Friday, waiting for more relevant data to define a trend. The imminent release of the repayment figures for the second LTRO plus the German IFO and the Growth Forecasts by the European Commission would give the cross volatility.
According to Lee Hardman, Currency Analyst at BTMU, “Consensus is looking for a repayment of around EUR125.0 billion. A larger than expected repayment today is likely to have a more limited positive impact upon the euro as the market is more comfortable that euro-zone short rates will remain low especially as the probability of an ECB rate cut is rising again”.
In addition, Karen Jones –Head of FICC Technical Analysis at Commerzbank - expects a weekly close below the 7-month uptrend at 1.3202 to confirm the down-move, and adds, “… given US dollar strength elsewhere we will now maintain a negative bias to EUR/USD. We have a downside target to 1.2679/61. This is the 61.8% retracement of the move up from July 2012 and the November 2012 low. Initial support is 1.3075/3, the 38.2% retracement of the same move”.
Strategists G.Yu and G.Berry at UBS remain neutral on the cross, suggesting, “A closing break below 1.3187 would be a bearish development; exposing 1.3063 ahead of 1.2998. Resistance is at 1.3291 ahead of 1.3434”.
According to Lee Hardman, Currency Analyst at BTMU, “Consensus is looking for a repayment of around EUR125.0 billion. A larger than expected repayment today is likely to have a more limited positive impact upon the euro as the market is more comfortable that euro-zone short rates will remain low especially as the probability of an ECB rate cut is rising again”.
In addition, Karen Jones –Head of FICC Technical Analysis at Commerzbank - expects a weekly close below the 7-month uptrend at 1.3202 to confirm the down-move, and adds, “… given US dollar strength elsewhere we will now maintain a negative bias to EUR/USD. We have a downside target to 1.2679/61. This is the 61.8% retracement of the move up from July 2012 and the November 2012 low. Initial support is 1.3075/3, the 38.2% retracement of the same move”.
Strategists G.Yu and G.Berry at UBS remain neutral on the cross, suggesting, “A closing break below 1.3187 would be a bearish development; exposing 1.3063 ahead of 1.2998. Resistance is at 1.3291 ahead of 1.3434”.