4 Feb 2016
EUR/USD forecast: deflating from 1.11 – Commerzbank and Westpac
The single currency is returning to the 1.1070 area vs. the dollar after Wednesday’s abrupt up move continues to ebb.
“Tough to buy EUR/USD north of 1.10, especially now that the bulk of 2016 Fed hike risk has been removed and ahead of the ECB’s March meeting where another cut in their deposit rate is on the cards. EUR a very tempting short ahead of the March 10 ECB meeting if 1.12/1.13 prints”, noted strategists at Westpac.
Furthermore, Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued the pair “has eroded the 2014-2016 downtrend, the 55 week ma at 1.1040 and the 200 day ma at 1.1055. We are currently seeing a stab up towards 1.1187, where we would expect to see the move falter. Intraday dips lower are indicated to hold circa 1.10 and are implying scope to the 1.1495 October and the 1.1713 August highs.
“Tough to buy EUR/USD north of 1.10, especially now that the bulk of 2016 Fed hike risk has been removed and ahead of the ECB’s March meeting where another cut in their deposit rate is on the cards. EUR a very tempting short ahead of the March 10 ECB meeting if 1.12/1.13 prints”, noted strategists at Westpac.
Furthermore, Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued the pair “has eroded the 2014-2016 downtrend, the 55 week ma at 1.1040 and the 200 day ma at 1.1055. We are currently seeing a stab up towards 1.1187, where we would expect to see the move falter. Intraday dips lower are indicated to hold circa 1.10 and are implying scope to the 1.1495 October and the 1.1713 August highs.