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28 Jan 2014
Flash: What can we do with the EUR/USD? – Westpac and Commerzbank
FXstreet.com (Edinburgh) - The EUR is trading on the back footing on Tuesday, pushing the EUR/USD to 2-day lows near 1.3630 ahead of the FOMC gathering due tomorrow.
In the opinion of analysts at Westpac Global Strategy Group, “ Improvement in Eurozone Jan PMIs was encouraging but not a game changer. Short term core EZ-US yield spreads have slipped to their least EUR supportive levels in 2 months, suggesting EUR is more fairly valued nearer 1.30/1.32. EUR/USD should continue to meet sellers with a 1.37 handle, with the expected FOMC taper and decent US GDP likely to reinforce underlying the growth divergence story”.
“It is possible that the rally towards the 1.3745/50 61.8% retracement is the maximum upside that we will see and the correction is already over. However it is not clear and we must allow for possibly 1.3810 before we fail”, observed Karen Jones, Head of FICC Technical Analysis at Commerzbank.
In the opinion of analysts at Westpac Global Strategy Group, “ Improvement in Eurozone Jan PMIs was encouraging but not a game changer. Short term core EZ-US yield spreads have slipped to their least EUR supportive levels in 2 months, suggesting EUR is more fairly valued nearer 1.30/1.32. EUR/USD should continue to meet sellers with a 1.37 handle, with the expected FOMC taper and decent US GDP likely to reinforce underlying the growth divergence story”.
“It is possible that the rally towards the 1.3745/50 61.8% retracement is the maximum upside that we will see and the correction is already over. However it is not clear and we must allow for possibly 1.3810 before we fail”, observed Karen Jones, Head of FICC Technical Analysis at Commerzbank.