EUR: Scope for additional near-term gains - BBH
|Analysts at BBH note that the euro dropped from a little above $1.20 on September 22 to a low last week a just below $1.1720 and recovered ahead of the weekend, on the last trading day of the month and quarter.
Key Quotes
“There is scope for additional near-term gains, perhaps spurred by the weekend press, much of which seems critical of the White Houses tax proposals for being sops for the wealthy and corporations. The disappointment over the unexpected decline in the core PCE deflator keeps investors skeptical about the scope for continued tightening next year.”
“In any event, the euro can recover into the $1.1860-$1.1890 area without jeopardizing out the negativity evident in the weekly bar charts, and signified by the end of the six-month advancing streak in September. We have noted the potential head and shoulders topping pattern, which projects toward $1.16, which is around the 20-week moving average. The mid-August lows were set a bit higher near $1.1660. The weekly Slow Stochastics have turned down, and the MACDs appear poised to cross lower. The weekly RSI is showing a bearish divergence by not confirming the recent highs in the euro.”
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