Forex Flash: EUR/USD caught in a limbo - Commerzbank

FXstreet.com (Barcelona) - Commerzbank analysts see the market in a limbo “between a US economy for which ‘QE3 plus’ has become less likely thanks to the surprisingly solid labour market report last week and a euro zone which is still not agreeing on the conditions for peripheral countries which want to enjoy unlimited ECB interventions”. This limbo favors the greenback as the half-life of European rescue efforts is in its disenchantment phase.

“Even if the falling volatilities on the markets suggest something else the uncertainty about the hurdles to be overcome by a Spanish request for help and the implementation and implications of the ECB’s Outright Monetary Transactions has caused many market participants to remain on the side-lines”, wrote analyst Carolin Hecht, allowing EUR/USD jumps in such environment, with no important data publications and non-events such as the Rajoy-Hollande meeting. “The Fed’s Beige Book is due in time for US trading, its anecdotal evidence on the US economy might question the positive labour market report of last week”, analysts wrote.

During Asian trading EUR-USD recorded a new low at 1.2835 this morning. At the lower end the currency pair now meets solid support around the 200 day ma at 1.2825.

“Should EUR-USD fail at these levels (200-day MA at 1.2825) we do not expect it to experience a further round of party mood though following the recent disenchantment”, they said, pointing to next resistance at 1.2975 and a very limited upside potential.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

RELATED TOPICS