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27 Jun 2013
A critical situation for the EUR/USD; 1.3000: Up or down?
FXstreet.com (San Francisco) - Thursday will critical for the EUR/USD. After falling 0.55% on the day, the EUR/USD definitely lost the 1.3100 area early on Wednesday and it declined to test the 1.3000 key level, but the pair managed to don't close the day below this number and currently it's pricing at 1.3010.
The Greenback advanced on Wednesday against its major competitors as investors watched the revision to a growth of 1.8% in Q1 in the United States as a sign that the Federal Reserve is far from tapering its QE. However, the market felt that the US is in better shape than the Eurozone and, in this way, they bet to buy stocks and Dollars.
Technically speaking, the EUR/USD is strongly bearish in the 1-hour chart according to the FXstreet.com trend index. Indicators such as MACD, CCI and Momentum are pointing to the south, while the Stochastic is neutral.
"The EUR/USD is having a hard time trying to hold to 1.3000," commented FXstreet.com Chief Analyst Valeria Bednarik in a recent report. As for the short term, "the EUR/USD remains under pressure," Bednarik continued while she pointed that "key resistance is now around 1.3060, 61.8% retracement of its latest daily run, while 1.2980 is the support to break to see further downside momentum in the pair."
However, investors are wondering whiting the EUR/USD will hold or not. As BK's Managing Director Kathy Lien stated in an article, "with the euro failing to break below this level [1.30]in a meaningful way," the "next 24 hours will critical for the euro." There are "a number of FOMC voters speaking tomorrow" and a busy calendar in the Eurozone and the United States put the pair in a jeopardize situation.
"A large part of the sell-off in the EUR/USD from its high of 1.34 on June 19th to its low of 1.2985 today was driven by re-pricing of FOMC expectations," Lien continues, "which means tomorrow's speeches by FOMC voters Dudley and Powell are extremely important."
Meanwhile, expectations continue to the downside at least in the big banks’ desk. The ING analysts’ team sees the USD "rallying broadly 10% over the next 6-12 months, which will send EUR/USD close to 1.20." HSBC published that the "USD is in the midst of a powerful rally," as they believe "the intensification of the Currency War is playing its part in the USD gains."
Rabobank is more tempered. The bank's analysts aren't too bearish as they expect the EUR/USD to hold in the 1.34-1.32 region on a 3 mth view. In the 1-year view, however, they expect EUR/USD in 1.28 zone with downside risks. Nevertheless, The FXstreet.com forecast poll shows a significant data: only 2 banks and 2 traders aren't bearish in EUR/USD for the current week.
The Greenback advanced on Wednesday against its major competitors as investors watched the revision to a growth of 1.8% in Q1 in the United States as a sign that the Federal Reserve is far from tapering its QE. However, the market felt that the US is in better shape than the Eurozone and, in this way, they bet to buy stocks and Dollars.
Technically speaking, the EUR/USD is strongly bearish in the 1-hour chart according to the FXstreet.com trend index. Indicators such as MACD, CCI and Momentum are pointing to the south, while the Stochastic is neutral.
"The EUR/USD is having a hard time trying to hold to 1.3000," commented FXstreet.com Chief Analyst Valeria Bednarik in a recent report. As for the short term, "the EUR/USD remains under pressure," Bednarik continued while she pointed that "key resistance is now around 1.3060, 61.8% retracement of its latest daily run, while 1.2980 is the support to break to see further downside momentum in the pair."
However, investors are wondering whiting the EUR/USD will hold or not. As BK's Managing Director Kathy Lien stated in an article, "with the euro failing to break below this level [1.30]in a meaningful way," the "next 24 hours will critical for the euro." There are "a number of FOMC voters speaking tomorrow" and a busy calendar in the Eurozone and the United States put the pair in a jeopardize situation.
"A large part of the sell-off in the EUR/USD from its high of 1.34 on June 19th to its low of 1.2985 today was driven by re-pricing of FOMC expectations," Lien continues, "which means tomorrow's speeches by FOMC voters Dudley and Powell are extremely important."
Meanwhile, expectations continue to the downside at least in the big banks’ desk. The ING analysts’ team sees the USD "rallying broadly 10% over the next 6-12 months, which will send EUR/USD close to 1.20." HSBC published that the "USD is in the midst of a powerful rally," as they believe "the intensification of the Currency War is playing its part in the USD gains."
Rabobank is more tempered. The bank's analysts aren't too bearish as they expect the EUR/USD to hold in the 1.34-1.32 region on a 3 mth view. In the 1-year view, however, they expect EUR/USD in 1.28 zone with downside risks. Nevertheless, The FXstreet.com forecast poll shows a significant data: only 2 banks and 2 traders aren't bearish in EUR/USD for the current week.