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8 Oct 2013
Flash: What’s the sentiment around the EUR/USD today? – Westpac and Commerzbank
FXstreet.com (Edinburgh) -The bloc currency remains range bound at the beginning of the week, with the EUR/USD meandering around 1.3560-1.3580 against the backdrop of increasing risk aversion and the lack of news regarding the US shutdown and the debt ceiling.
According to Westpac Global Strategy Group, “Downside should be limited near term as the US standoff hurts USD sentiment, with our 1 month target 1.37. A bonus is Italy’s relative political stability all of a sudden. The latest update on IMM futures positioning (pre-US shutdown) saw the longest spec EUR net longs since May 2011, which will have increased since then. But this should only be a modest brake on the pace of gains rather than an argument for reversal just yet”.
Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued that a break below August’s high at 1.3453 is needed in order to offset the bid tone in the pair. She added the pair “has eroded its accelerated uptrend and its daily RSI has diverged. This coupled with the close proximity of the 1.3670/1.3710 key resistance increases the risk of failure here”.
According to Westpac Global Strategy Group, “Downside should be limited near term as the US standoff hurts USD sentiment, with our 1 month target 1.37. A bonus is Italy’s relative political stability all of a sudden. The latest update on IMM futures positioning (pre-US shutdown) saw the longest spec EUR net longs since May 2011, which will have increased since then. But this should only be a modest brake on the pace of gains rather than an argument for reversal just yet”.
Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued that a break below August’s high at 1.3453 is needed in order to offset the bid tone in the pair. She added the pair “has eroded its accelerated uptrend and its daily RSI has diverged. This coupled with the close proximity of the 1.3670/1.3710 key resistance increases the risk of failure here”.