Fundamental Analysis by Morgan Stanley - EUR: 'we remain bearish on EUR over the medium term'
Morgan Stanley made weekly forecast for EUR in fundamental/technical mixed way expecting bearish EUR:
"We remain bearish on EUR over the medium term but see reason for some support in the near term. EURUSD continues to be inversely correlated with risk appetite. This suggests that as global volatility remains high and risk appetite weak then there is reason to see EUR supported. Draghi sounded very dovish at the recent ECB press conference so, should the voices from the central bank suggest more aggressive monetary action, then this would be a risk factor to our near-term view."
From the technical point of view - EUR/USD is located below
100-SMA/200-SMA for ranging within 1.1713 key resistance and 1.0807 key
support levels for crossing symmetric triangle pattern for the
trend to be continuing. Intermediate support level as the nearest bearish target is 1.0925, and the key bearish target is 1.0807. The situation with EUR/USD may be described on the following way:
- market rally to be continuing, or
- the bearish trend to be re-started.
We think the direction of EUR/USD movement for this week depends entirely on the fundamental news events such as Federal Funds Rate for example.
