24 Sep 2013
Flash: EUR/USD above 1.3500 and IFO looming. What’s next? – Commerzbank and UBS
FXstreet.com (Edinburgh) -The EUR/USD is testing Monday’s lows in the area of 1.3495/90, fading the earlier bull attempt to 1.3520 as poor IFO numbers are weighing on the shared currency. Ahead in the day, the pair would remain under pressure, as housing data and Consumer Confidence are due in the US economy.
According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair “charted an outside day to the downside and we suspect near term risks are reverting to the downside… Initial support is the 1.3453 August high and the 1.3463 accelerated uptrend – only a close below here would alleviate immediate upside pressure and signal a slide back to the 1.3265/1.3166 55 and 200 day ma”.
“The ECB may well be getting concerned over the removal of excess liquidity but an actual rate cut coupled with a more explicit definition of “extended period” may be required in order to counter the risk of upward pressure on short-term yields in the euro-zone… upside potential for EUR/USD at these levels is pretty limited”, argued Derek Halpenny, European Head of Global Markets Research.
According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair “charted an outside day to the downside and we suspect near term risks are reverting to the downside… Initial support is the 1.3453 August high and the 1.3463 accelerated uptrend – only a close below here would alleviate immediate upside pressure and signal a slide back to the 1.3265/1.3166 55 and 200 day ma”.
“The ECB may well be getting concerned over the removal of excess liquidity but an actual rate cut coupled with a more explicit definition of “extended period” may be required in order to counter the risk of upward pressure on short-term yields in the euro-zone… upside potential for EUR/USD at these levels is pretty limited”, argued Derek Halpenny, European Head of Global Markets Research.