7 Jan 2015
EUR sees a strong downside pressure – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, notes technicals indicate that EUR sees a strong downward pressure and suggests that it is too early to see a bottom, with supports at 1.1825, 1.1800 and then 1.1700 levels.
Key Quotes
“EUR is weak, trading down to fresh 9‐year lows as the flash Euro area CPI disappointed, declining to –0.2%y/y and marking the entry into deflation. Most of the pressure came from energy, which as a component in CPI was down –6.3%, but food was also flat; while the price of services increased 1.2%.”
“The ECB is likely to meet the release with a broadening in its asset purchase program, pointing less to the release itself and more to the building of deflationary mindsets. We see this as EUR negative.”
“EURUSD short‐term technicals: bearish—technical studies all warn of downside risk with few warnings on the charts. Downward pressure is strong and it is too early to pick a bottom. Technical support levels from here turn to the 2006 lows of 1.1825, then the whole numbers of 1.1800, 1.1700, then the 2005 lows of 1.1640.”
Key Quotes
“EUR is weak, trading down to fresh 9‐year lows as the flash Euro area CPI disappointed, declining to –0.2%y/y and marking the entry into deflation. Most of the pressure came from energy, which as a component in CPI was down –6.3%, but food was also flat; while the price of services increased 1.2%.”
“The ECB is likely to meet the release with a broadening in its asset purchase program, pointing less to the release itself and more to the building of deflationary mindsets. We see this as EUR negative.”
“EURUSD short‐term technicals: bearish—technical studies all warn of downside risk with few warnings on the charts. Downward pressure is strong and it is too early to pick a bottom. Technical support levels from here turn to the 2006 lows of 1.1825, then the whole numbers of 1.1800, 1.1700, then the 2005 lows of 1.1640.”