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31 Mar 2014
EUR/USD: Support 1.3650-75 technically interesting - BBH
FXStreet (Bali) - Marc Chandler, Global Head of Currency Strategy at BBH, shares his outlook on the EUR/USD for the week ahead, noting that $1.3650-75 area is technically a very interesting area.
Key Quotes
"The combination of the dovish comments from ECB officials, where even the Bundesbank appears to have warmed to the idea of QE, and the somewhat more hawkish FOMC, has prompted some profit-taking on long euro positions. The euro peaked just shy of the $1.40 level on March 13. While Draghi's comments helped put the euro's top in, it was Yellen's comments that exposed the downside."
"The euro was briefly pushed through the $1.3720 area, the 50% retracement of the euro's rally from early February lows, just below $1.33, which is the low for the year, thus far. Resistance is now seen in the $1.3800-30 area. The outlook hinges on the ECB meeting on Thursday. The failure to take strong action (this means more than a symbolic 10 bp cut in the repo rate, which would have little consequence) could send the euro back to $1.40, if not above. On the downside, the $1.3650-75 area is technically interesting, housing a key retracement objective, the 100-day moving average and the late-February lows."
Key Quotes
"The combination of the dovish comments from ECB officials, where even the Bundesbank appears to have warmed to the idea of QE, and the somewhat more hawkish FOMC, has prompted some profit-taking on long euro positions. The euro peaked just shy of the $1.40 level on March 13. While Draghi's comments helped put the euro's top in, it was Yellen's comments that exposed the downside."
"The euro was briefly pushed through the $1.3720 area, the 50% retracement of the euro's rally from early February lows, just below $1.33, which is the low for the year, thus far. Resistance is now seen in the $1.3800-30 area. The outlook hinges on the ECB meeting on Thursday. The failure to take strong action (this means more than a symbolic 10 bp cut in the repo rate, which would have little consequence) could send the euro back to $1.40, if not above. On the downside, the $1.3650-75 area is technically interesting, housing a key retracement objective, the 100-day moving average and the late-February lows."