12 Jul 2013
Flash: EUR/USD may see 1.3300/400 – Westpac
FXstreet.com (New York) - Super strong reversal off key support at 1.2745 (2013 YTD lows) following Bernanke’s more dovish account of the US economy suggests a strong low is in place, notes Sean Callow, a Global FX Strategist at Westpac.
Ultimately, “the EUR/USD may see 1.3300 and even 1.3400 given strong odds Bernanke repeat a more dovish tone at next week’s semi annual testimony. However, we prefer to sit on the sideline and sell into 1.3400. Longer-term Fed is still more likely to ease the pace of accommodation before the ECB and political risks are slowly building again across the periphery. Heightened chances of an S&P downgrade of Spain (currently just above junk) following their decision to downgrade Italy.” Callow adds.
Ultimately, “the EUR/USD may see 1.3300 and even 1.3400 given strong odds Bernanke repeat a more dovish tone at next week’s semi annual testimony. However, we prefer to sit on the sideline and sell into 1.3400. Longer-term Fed is still more likely to ease the pace of accommodation before the ECB and political risks are slowly building again across the periphery. Heightened chances of an S&P downgrade of Spain (currently just above junk) following their decision to downgrade Italy.” Callow adds.