First a well above consensus Pending Home Sales in October that spurs fears on QE suspension. Second the Democratic leader Chris Van Holland saying that the two sides are not close to a deal on the fiscal cliff. And third a very well anticipated sell interest just above the 1.3000 mark. This cocktail was used to launch the pair around 45 pips down where the EUR/USD found support.
But according to the Bank of Tokyo-Mitsubishi UFJ's European Head of Global Research Derek Halpenny, the EUR/USD "will continue to be contained by the belief that the Fed will maintain an ultra-loose monetary stance."
In a recent note, Halpenny pointed that "operation twist ends next month but may be replaced by balance sheet expansion while Chicago Fed President Evans today cited an unemployment rate of 6.5% as the level to reach before the Fed considers rate increases."
BTMU expert believes that a "pop higher in EUR/USD over 1.3000 that looks imminent should be taken as a good opportunity to sell" as far as "the downward trend in EUR/USD still intact."