22 Dec 2014
EUR is up off its lows, focus still on ECB QE – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes that EUR is up 0.3% in the NA open after Friday’s lows, further adding that with limited data in sight the focus still remains in the ECB QE.
Key Quotes
“EUR is up 0.3% into the NA open; however the core takeaway is that EUR fell to fresh lows on Friday, flirting with a break below 1.22. News reports continue to focus on the German stance on potential ECB QE, with several reports suggesting that those close to Chancellor Merkel are not in favour.”
“European yields continue to fall, with most yields at or close to multi‐year lows (see table). Pre‐positioning for the potential of ECB QE is helping to suppress yields, which will begin to paint the central bank into a corner. We expect EUR to trend lower in 2015; however warn that this week it could fall victim to liquidity constraints and holiday positioning flows.”
“EURUSD short‐term technicals: bearish—Most technical studies warn of EUR downside risk, warning that EUR is likely to break to fresh lows. We are biased to be short, looking for fresh EUR lows in the near‐term.”
Key Quotes
“EUR is up 0.3% into the NA open; however the core takeaway is that EUR fell to fresh lows on Friday, flirting with a break below 1.22. News reports continue to focus on the German stance on potential ECB QE, with several reports suggesting that those close to Chancellor Merkel are not in favour.”
“European yields continue to fall, with most yields at or close to multi‐year lows (see table). Pre‐positioning for the potential of ECB QE is helping to suppress yields, which will begin to paint the central bank into a corner. We expect EUR to trend lower in 2015; however warn that this week it could fall victim to liquidity constraints and holiday positioning flows.”
“EURUSD short‐term technicals: bearish—Most technical studies warn of EUR downside risk, warning that EUR is likely to break to fresh lows. We are biased to be short, looking for fresh EUR lows in the near‐term.”