25 Mar 2015
EUR/USD correction slowing? – KBC
FXStreet (Barcelona) - The KBC Bank Research Team believes that the EUR/USD rally might be slowing as the pair failed to break the post-Fed high at 1.1043, but any sustained USD comeback looks highly unlikely as US bond yields continue to fall.
Key Quotes
“The dollar lost quite some interest rate support after last week’s FOMC decision as markets anticipate a very gradual Fed tightening cycle.”
“Yesterday, the dollar decline halted ahead of the post-Fed high in EUR/USD (1.1043). We have the impression that the EUR/USD rally/correction is slowing. However, any sustained comeback of the dollar looks difficult as long as US bond yields keep falling. Or will QE again take over as a driver for euro trading?”
“We look how the 1.1043/1.1098 resistance area holds. We eventually prefer to sell into strength, but are in no hurry to rush in already at this stage.”
“The technical picture for the EUR/USD cross rate is bearish since the pair dropped below the previous cycle low (1.1098). The 1.0500 area was extensively tested, but a sustained break didn’t occur.”
“In the wake of the Fed meeting, a first intermediate resistance at 1.0717 area was easily regained, an indication that the euro decline lost momentum. The 1.1043/98 (post FOMC high/prev. low) is a very important resistance.”
“A rebound north of 1.1534, still far away, is needed however to question the downtrend.”
Key Quotes
“The dollar lost quite some interest rate support after last week’s FOMC decision as markets anticipate a very gradual Fed tightening cycle.”
“Yesterday, the dollar decline halted ahead of the post-Fed high in EUR/USD (1.1043). We have the impression that the EUR/USD rally/correction is slowing. However, any sustained comeback of the dollar looks difficult as long as US bond yields keep falling. Or will QE again take over as a driver for euro trading?”
“We look how the 1.1043/1.1098 resistance area holds. We eventually prefer to sell into strength, but are in no hurry to rush in already at this stage.”
“The technical picture for the EUR/USD cross rate is bearish since the pair dropped below the previous cycle low (1.1098). The 1.0500 area was extensively tested, but a sustained break didn’t occur.”
“In the wake of the Fed meeting, a first intermediate resistance at 1.0717 area was easily regained, an indication that the euro decline lost momentum. The 1.1043/98 (post FOMC high/prev. low) is a very important resistance.”
“A rebound north of 1.1534, still far away, is needed however to question the downtrend.”