23 Mar 2015
EUR/USD sell-off to pause - TDS
FXStreet (Barcelona) - Shaun Osborne, Chief FX Strategist at TD Securities, views that longer-term technical charts suggest that a reversal might be developing for EUR/USD, but gains towards 1.11 should be used as a selling opportunity as the long-term bearish trend stays intact.
Key Quotes
“EURUSD had one of its best weeks in a while last week as the “dovish” Fed undercut the USD and forced USD longs to bail. The USD’s attempt to rally Thursday failed and, by the end of the week, the USD was looking quite soft, especially against the EUR.”
“Longer-term charts suggest a technical reversal may be developing; a second consecutive up week for the EUR this week—something we haven’t seen since October—would “confirm” the technical change in trend, in the short run at least."
“We have been concerned about the extended nature of the short EUR trade and the seasonal risks around the potential for EURUSD to bounce for some time now and the window for a corrective rally may be opening up a little more obviously as we move into April.”
“The case for longer-term USD-appreciation—based on the Fed still moving towards policy normalization while the ECB grows its balance sheet—remains intact, however, so we continue to feel that EURUSD gains towards the 1.11 area remain a selling opportunity.”
Key Quotes
“EURUSD had one of its best weeks in a while last week as the “dovish” Fed undercut the USD and forced USD longs to bail. The USD’s attempt to rally Thursday failed and, by the end of the week, the USD was looking quite soft, especially against the EUR.”
“Longer-term charts suggest a technical reversal may be developing; a second consecutive up week for the EUR this week—something we haven’t seen since October—would “confirm” the technical change in trend, in the short run at least."
“We have been concerned about the extended nature of the short EUR trade and the seasonal risks around the potential for EURUSD to bounce for some time now and the window for a corrective rally may be opening up a little more obviously as we move into April.”
“The case for longer-term USD-appreciation—based on the Fed still moving towards policy normalization while the ECB grows its balance sheet—remains intact, however, so we continue to feel that EURUSD gains towards the 1.11 area remain a selling opportunity.”