19 Jan 2015
EUR/USD quiet, above 1.1600
FXStreet (Edinburgh) - The European currency remains on the positive side vs. the US dollar on Monday, with EUR/USD currently hovering over the 1.1610/15 band.
EUR/USD recovery prior to ECB
‘Dead-cad’ bounce? Selling opportunity? Anticipation of an ECB disappointment? From all these, and much more, possibilities, it seems this is a good scenario for the advocates of ‘sell on strength’, as further downside would be expected in light of the almost sure adoption of sovereign quantitative easing by the ECB, to be announced on Thursday. Despite market participants have already priced in QE, the final amount of the stimulus programme - something between €500 billion and €1 trillion - carries the potential to surprise or disappoint the markets, and with it, the near/medium term outlook for the single currency. Today’s combination of extreme spec net-short positioning plus positive risk sentiment could be behind the current correction lower, although in the actual context it will surely probe to be just temporary.
EUR/USD levels to watch
As of writing the pair is up 0.37% at 1.1612 facing the next hurdle at 1.1649 (high Jan.16) followed by 1.1754 (10-d MA) and finally 1.1792 (high Jan.15). On the downside, a break below 1.1460 (11-year low Jan. 16) would target 1.1445 (low Nov.11 2003) en route to 1.1376 (low Nov.7 2003).
EUR/USD recovery prior to ECB
‘Dead-cad’ bounce? Selling opportunity? Anticipation of an ECB disappointment? From all these, and much more, possibilities, it seems this is a good scenario for the advocates of ‘sell on strength’, as further downside would be expected in light of the almost sure adoption of sovereign quantitative easing by the ECB, to be announced on Thursday. Despite market participants have already priced in QE, the final amount of the stimulus programme - something between €500 billion and €1 trillion - carries the potential to surprise or disappoint the markets, and with it, the near/medium term outlook for the single currency. Today’s combination of extreme spec net-short positioning plus positive risk sentiment could be behind the current correction lower, although in the actual context it will surely probe to be just temporary.
EUR/USD levels to watch
As of writing the pair is up 0.37% at 1.1612 facing the next hurdle at 1.1649 (high Jan.16) followed by 1.1754 (10-d MA) and finally 1.1792 (high Jan.15). On the downside, a break below 1.1460 (11-year low Jan. 16) would target 1.1445 (low Nov.11 2003) en route to 1.1376 (low Nov.7 2003).