The single currency is extending its buoyant march on Friday, eyeing the 1.3100 mark as of writing, after another round of quantitative easing by the Fed has spurred the demand for the euro and risk-associated assets in general on Thursday.
K.Jones, analyst at Commerzbank, assesses that after leaving behind 1.2939 (61.8% Fibo ret) the cross would now look towards 1.3057 and the 1.3150/77 region. The expert adds “we are cautious given the extent of the recent run up, but with technical indicators still positive there is not a lot to suggest failure”.
A.Lohmann-Rasmussen, Chief Analyst at Danske Bank, suggests after the FOMC announcements “we think that further dollar weakness is in the pipeline today, not only versus the euro but also versus cyclical, commodity and EM currencies, which are going to be the big beneficiaries of this move”.
Gareth Berry, analyst at UBS, maintains the bullish outlook on the cross, emphasizing the resistance level at 1.3151. Recall that the Swiss bank’s forecasts are: 1m 1.30 and 3m 1.25
Jane Foley, Senior Currency Strategist at Rabobank, comments that the FOMC announcements per se, although extremely important, do not constitute a ‘game-over’ move for the rest of the issues surrounding the bloc currency, as fiscal and banking union coupled with the likeliness of Spain asking for financial aid – despite the temporary relief of lower yields - continue to hover over the markets. The expert believes that significant setbacks could be on the cards throughout the rest of the month, and says “However, if Spain wriggles through its October refinancing without creating too much tension, we would concede that the risk of sharp pullbacks in EUR/USD in November and December could decline. For now EUR/USD looks to be well supported on dips. Resistance at EUR/USD 1.3145”.