Euro Dollar Rate Forecasts for 2014-2015 - page 35
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Here's why EURUSD longs may be the trade into the ECB Everyone is looking for a dovish Draghi and ECB, so will they deliver?
I'm keeping a close eye on this pair over the next few sessions as I'm thinking that the big opportunity is for longs not shorts
The market has been crowing about when the ECB will increase QE not if they will and they could be setting themselves up for disappointment
The ECB is facing the same problems that the rest of the world is facing and that's slowing growth. What's different in the US and UK is that domestically things are much better. After 8 months of QE there may have been some green shoots but nothing that you can say is trending considerably higher
Europe still faces low inflation and that's the ECB's number one mandate. Considering that nearly all of it is from oil, QE has no effect there.
Talk is cheap
Would more QE help Europe? That's the big question. If the ECB aren't getting a reaction to these amounts they need to understand why. Just chucking more in won't help. That's going to be one of the key aspects on Thursday and the big mover of the Euro. If they believe that they aren't doing enough then the market will be on the right side of expecting more. If they trot out the transitory guff and that QE still needs time to filter down the channels then the market will be wrong footed
Of course the Draghster may use the opportunity to talk the euro down by repeating that they are ready to do more. That line has been running for a while now and will be losing it's magic power. If the market thinks the ECB is all talk but no action then again, the euro is destined for the upside. The only talk that will count is if Draghi drops a big hint that they're ready to act. The messages from ECB members recently has been that they can move but are still willing to wait. It should also be noted that Germany doesn't vote at this meeting and they have the biggest voice.
So longs is what I'm looking at if we see some decent pre-ECB dips. I can't see them changing the current party line at this meeting, nor signalling any change at the next. That should be positive for euro which has been one a one way slide since last week
Where to get in?
1.1300 is looking a tough nut right now but the pressure on it remains. That means we could get a decent blow through at some point over the next couple of sessions. There's a support line from August that sits at 1.1290/95, the 100 H4 ma just under there at 1.1288 and then the 55 dma at 1.1221
read more
Citi Trade Of The Week: Sell EUR/GBP Targeting 0.725 Currency investors should consider selling EUR/GBP this week, advises CitiFX in its weekly FX pick to clients.
"EUR likely to be vulnerable approaching ECB. While it is likely premature to expect action from the ECB, some jawboning can be expected which is likely to add to expectation for additional easing in December. With EUR better supported by negative developments elsewhere than underlying conditions in the euro zone, this should translate to weakness on the crosses.
GBP is an attractive vehicle for EUR shorts. EURGBP recently failed at the May high and upward momentum looks overstretched, so technically a dip may be forthcoming. Weekly momentum on cable looks to be turning higher, painting constructive short-term picture for GBP on a technical basis.," Citi says as a rationale behind this call.
In line with this view Citi recommends selling EUR/GBP from 0.7367, with a target at 0.7250, and a stop at 0.7430.
EUR/USD: Have We Seen The Bulk Of The Down Move? - UOB The break below 1.1300 shifted the outlook for EUR/USD to bearish, says UOB Group.
"The price action exceeded our expectations by easily taking out strong supports at 1.1240 followed by 1.1085.
While it is too early to expect a bottom, it does feel like we have seen a bulk of the down-move.
That said, as long as 1.1200 is intact, further down-move to 1.1015 followed by 1.0970 would not be surprising," UOB argues.
EUR/USD: Weekly Evening Star: Levels & Targets - SocGen Corrective pullback in EUR/USD after testing multi decadal channel appears to be at an important juncture, argues SocGen.
"Considering a largely negative close this week, EUR/USD will form an evening star, a candlestick pattern that signals possibility of down move. It is noteworthy that this evening star coupled with a shooting star back in August gives bearish connotations," SocGen notes.
"Current pullback within flag resembles to the one in 1998-1999 when a shooting star ended the recovery. Weekly MACD indicator is still in negative territory and is close to a multiyear resistance trend which suggests the upside is capped," SocGen adds.
As such, SocGen thinks that the current break below 1.1085 means a retest of multi decadal channel support at 1.05/1.04 with intermittent targets at 1.0940 and May lows of 1.08.
"This massive channel remains the decisive level for next leg of downtrend as a move below 1.05/1.04 will confirm that the ongoing correction is not just a retracement of the up move since 2000 but in fact of the whole up cycle since the 1980s," SocGen adds.
USD: A Tale Of 2 Indices; EUR: Return Of The Draghi - CIBC The following are CIBC's latest weekly outlook for the USD, and EUR.
USD: A Tale of Two Indices. Since the middle of 2015, the two most quoted US dollar indices have been on divergent paths. While the Dollar Index (DXY) has languished, the Trade Weighted Index (TWI) has marched ever higher.
The movements in both indexes represent pain for many stakeholders. The fact that the DXY, which is made up of five large economies, has not appreciated means that struggling economies like the euro area, Japan and Canada have not benefited from the prospects of higher US rates.
Conversely, the appreciation in the TWI, which has come at the expense of emerging markets, has made outstanding USD denominated debt more expensive to pay back in those countries. Finally, the appreciation of the broader TWI means that the currency has been a drag on US growth too.
EUR: Return of the Draghi. Compared to the rest of the world, Eurozone growth has been holding up pretty well this year, and the composite PMI actually saw a modest and unexpected pick-up in October.
However, ECB head Mario Draghi breathed fire on the euro again this week by implying that further stimulus could be coming in December, either by cutting deeper into negative territory or adding to the ongoing asset purchase program. Concerns include how low inflation is currently and how much Eurozone GDP growth is still reliant on lower energy prices and the weaker euro.
Providing new stimulus would keep the euro weaker and see the euro fall further, hitting 1.07 by year-end.
read more
EUR/USD: Euro Continues Recovery After US Data Disappoint
Home sales in the US dipped by the biggest margin in two years in September. Figures dropped 11.5% to 468,000 after August's figure was revised downward to 529,000.
The euro has been trading up 0.42% at $1.1057, up from daily lows of $1.0998.
Earlier on Monday, the German lfo survey for October was released but it didn't spur any movement on the markets. The business climate recorded a slight drop from 108.5 to 108.2, current assessment also decreased to 112.6 from 114.0 and the expectations gauge improved from 103.3 to 103.8.
Germany's resilient economic conditions are a result of continued growth in the service sector and strong domestic demand. Deteriorating external conditions, including a slowdown in major emerging markets has done little harm to the German economy. The ECB asset purchasing program greatly benefits Germany, as the nation takes support from a weak euro and low interest rates.
read more