FXstreet.com (Barcelona) - TD Securities analysts believe the EUR/USD current upside is on account of a massive reduction in EUR short positions “rather than a strong endorsement of the ECB’s plan”, since a real confident outlook would send the pair a lot higher. Some reports say the German government seems to be OK with the ECB’s position (which supports the EUR), but on the other hand, other reports say there is growing tension between Italy and Germany and broader political concern in Germany at recent ECB policy developments.
Action in the Eurozone is unlikely to provide support for the EUR in the long run: “Firstly, activation of the EFSF/ESM is likely to quickly focus attention on the still limited resources available to support a large, at-risk sovereign within the Eurozone”, wrote TD Securities analysts, pointing also to the severe fundamental pressure shown in the Eurozone domestic data.
“We look for limited EUR gains from here but have to concede that a push through the low 1.24 area (collection of resistance points and the post ECB high from Thursday) may push the market to the mid 1.25 area”, the economists added, pointing to support at 1.2335/50.
Action in the Eurozone is unlikely to provide support for the EUR in the long run: “Firstly, activation of the EFSF/ESM is likely to quickly focus attention on the still limited resources available to support a large, at-risk sovereign within the Eurozone”, wrote TD Securities analysts, pointing also to the severe fundamental pressure shown in the Eurozone domestic data.
“We look for limited EUR gains from here but have to concede that a push through the low 1.24 area (collection of resistance points and the post ECB high from Thursday) may push the market to the mid 1.25 area”, the economists added, pointing to support at 1.2335/50.
