EUR/USD Send Signals of Topping in the Near-Term - BTMU
Analysts from The Bank of Tokyo-Mitsubishi UFJ, noted that the failure
to break higher in the EUR/USD during recent trading sends a signal of a
potential near-term top.
“The euro remains relatively stable against the US dollar in the near-term. The euro is still attempting to break higher but continues to fail which is sending a tentative technical signal that the pair maybe in the process of topping out in the near-term.”
“It fits with our fundamental view that downside risks are gradually building although are not yet compelling for us to adopt a bearish bias. The ECB’s policy announcement was neutral for the euro reiterating mainly the same message as at their last meeting in March.”
“More interestingly, we noted a stronger message from President Draghi that the ECB is willing to ease policy further if there is an unwanted tightening in monetary conditions. The focus in the week ahead will shift to the upcoming FOMC meeting. Similar to the ECB, the Fed is likely to present a largely unchanged policy stance offering little support for the US dollar. However, as the market is now pricing such little Fed tightening it would appear the risks are more skewed to the upside for the US dollar.”