Euro Dollar Rate Forecasts for 2014-2015 - page 22
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Where To Sell EUR/USD? - Credit Suisse, Barclays, UBS, SocGen
As EUR/USD is drifting lower again, Credit Suisse, Barclays Capital, UBS, and SocGen provide their views and tactical strategies on the important levels if considering a short position.
Credit Suisse: "EURUSD has been capped below the 50% retracement of the recent fall and the 55-day average at 1.1117/32, and reversed lowe," CS notes.
"Beneath 1.0925 can open up a retest of the more important price lows at 1.0819/09. Near-term resistance moves to 1.1022. Above 1.1080/85 is needed to retest 1.1117/32," CS adds.
CS runs a limit order to sell EUR/USD at 1.1020, with a stop at 1.1080 and a target 1.0820.
Barclays: "The move below nearby support in the 1.0925 area encourages our bearish view towards the 1.0810 lows," Barclays clarifies.
"A break below 1.0810 would signal lower towards our next targets near 1.0675 and then the 1.0460 year-to-date lows," Barclays projects.
UBS: "We think the market will be keen to sell any rallies. We recommend a short closer to 1.0990, with a stop above 1.1120/30," UBS advises.
SocGen: "EUR/USD has formed a probable double top at 1.1450/1.1536. Weekly RSI is retracing after testing 50% graphical level which highlights 1.1450/1.1536 as key," SocGen notes.
"The pair looks poised to head towards confirmation level of the pattern at 1.08/1.0780, a break below which will signal a revisit of 1.05/1.04 with intermittent support at 1.07," SocGen adds.
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Deutsche Bank says still some USD appreciation to go, but deceleration may be due
Deutsche Bank Markets Research published a piece on Thursday with a look at the USD.It's a look at longer-term trends.
In a brief summary of the major points:
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EUR/USD: Corrective/Messy - Goldman Sachs
Corrective markets tend to be messy and difficult which is very much the case for EUR/USD, notes Goldman Sachs Techs.
"The rally from Mar. 16th to May 15th met a 1.618 extension target at 1.1482. The decline since May 15th is approaching a 1.00 extension target at 1.0790," GS adds.
"From this point onwards, would expect to see another minor ABC/5-wave move develop from the 1.0790 low. A possible ABC from the Jul. 20th low extends out to 1.1216. A break above that point will increase the chances of eventually reaching 1.1414-32 (1.618 from Jul. 20th and a 0.618 extension from Mar. ‘15)," GS projects.
"Would have to see a close below 1.0790 to suggest potential for a serious decline to develop," GS adds.
EUR/USD Into NFP: What To Expect & Where To Sell? - SocGen
The week’s big focus will be on US data, and the labour market report on Friday in particular, notes SocGen.
"There’s a risk that we see edgy markets in the meantime...At the risk of sounding like a broken record, the case for raising rates to less unusually low levels does not rest on wage growth or inflation returning in earnest first. Rates are too low, and capital is misallocated as a result," SocGen adds.
"More than the wage data however, we’d focus on the unemployment rate. We look for a solid 240k increase in non-farm payrolls, a 2.2% increase in hourly earnings and a drop to 5.2% from 5.3% in the unemployment rate," SocGen projects.
"Anything that gets the front end of the curve higher in the US should be negative for EUR/USD. A meander back above 1.10 is possible in the early part of the week, but we’d like to sell against 1.11 and look for a break lower in August," SocGen advises
EUR: A Summer Lull? Think Again - Credit Agricole
Investors’ concerns about Greece have taken a backseat and the risks of renewed disinflation or slowdown in the Eurozone, while growing of late, do not seem to represent an immediate risk.
EUR crosses should therefore remain at the mercy of drivers outside the single currency area. We expect policy divergence to become an even more important theme for the FX markets with the July NFP and the BOE trifecta potentially encouraging further frontloading of Fed and BoE rate-hike expectations.
In turn, this should keep the risks for EUR/USD and EUR/GBP on the downside in the near term.
Indeed, our short-term FX fair-value model for EUR/GBP is suggesting that the cross is looking overvalued at current levels.
EUR/USD: Near Breakout - JP Morgan
The rather dull trading sessions as of late within fairly tight ranges didn’t deliver any fresh insights, so that prevailing trends as well as displayed ranges remain intact, notes JP Morgan.
"That said patience is a virtue once again during this hot summer break, which doesn’t leave us much of a choice than to wait for range breakouts to finally create some momentum,"JPM adds.
In this context, JPM thinks that EUR/USD is close to break below 1.0885/70 (minor 76.4 %/pivot) which should trigger another sell-off.
"The latest failure to clear key-resistance at 1.1099/1.1120 (daily trend/minor 76.4 %) leaves the market at great risk of extending the downside," JPM argues.
"A break below 1.0885/70 (minor 76.4 %/pivot) would most likely trigger the latter, but only below 1.0744 we'd receive confirmation that 1.0072 (76.4 % of the 2000-2008 rally) is back in focus," JPM projects.
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Tomorrow Euro goes UP
Get Ready For Another EUR/USD Sell-Off Coming Weeks - Credit Agicole
The EUR has been broadly range-bound over the past few weeks, mainly due to relatively stable policy differentials.
As the ECB has repeatedly reaffirmed that QE will run its course, it will be down to further rising Fed rate expectations to enable the pair to break through the past few weeks’ trading range.
Despite Fed Chair Yellen and central bank member Lockhart making a stronger case for higher rates as soon as September, investors still seem to doubt their readiness to act.
Still-weak price developments, the dampening impact of a stronger USD on inflation expectations and/or continuing uncertainty regarding global growth conditions seem to be driving this sentiment.
However, as a further improving labour market should ultimately lead to accelerating price developments, and given medium-term inflation expectations have remained strongly supported of late, we remain of the view that the Fed will indeed start to tighten monetary policy in September.
Considering that such an outcome is not yet fully priced in, there appears to be room for policy differentials to diverge anew, pushing EUR/USD closer to 1.05 and possibly below. In a Fed-driven market, the single currency should become less sensitive to risk sentiment too.
As a result, and in line with our September forecasts, we expect EUR/USD to face further downside risk going into the September Fed meeting. In the aftermath we believe the pair should stabilise given the probability of the Fed preparing the market with a very gradual approach to tightening policy further.
**CACIB targets EUR/USD at 1.06 by September and at 1.04 by year-end.
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I don't think that rate hike (if they hike rates ever) will change anything - QE4 is around the corner
I don't think that rate hike (if they hike rates ever) will change anything - QE4 is around the corner
Shhhhh ... that is FEDs best kept secret
:):)