FXstreet.com (Barcelona) - The single currency keeps inching higher on Friday, closer to the 1.2700 mark as risk appetite remains strong.
In the view of K.Kirkegaard, Senior Analyst at Danske Bank, as the expectations going into the EU Summit were so low and the USD longs so abundant, a ‘domino effect’ derived from positions being stopped out were triggered after the announcements have surprised the markets, and thus the spike in EUR to levels well above 1.2600
The expert commented that however “...the key game changer for the near term will be whether the bailout funds are used to buy government debt…”, necessary condition to sustain an upside in the cross.
“…In the absence of further market supportive announcements we doubt that EUR/USD will be able to sustain its recent gains, as the ECB is expected to cut rates next week. As a result, we keep our 3M forecast unchanged at 1.24 for now…”.
In the view of K.Kirkegaard, Senior Analyst at Danske Bank, as the expectations going into the EU Summit were so low and the USD longs so abundant, a ‘domino effect’ derived from positions being stopped out were triggered after the announcements have surprised the markets, and thus the spike in EUR to levels well above 1.2600
The expert commented that however “...the key game changer for the near term will be whether the bailout funds are used to buy government debt…”, necessary condition to sustain an upside in the cross.
“…In the absence of further market supportive announcements we doubt that EUR/USD will be able to sustain its recent gains, as the ECB is expected to cut rates next week. As a result, we keep our 3M forecast unchanged at 1.24 for now…”.
