30 Aug 2013
Flash: Sell EUR/USD rallies towards upper 1.32s – TD Securities
FXstreet.com (New York) - The EUR/USD has consolidated in a tight range along with the rest of the majors overnight, as comments from the ECB’s Nowotny (reaffirming what forward guidance suggested: that rate hikes are very far off and rate cuts are possible), suggests the TD Securities Team.
Key quotes
Earlier today, “slightly softer Eurozone CPI receiving little reaction from the currency. The widening in German-US short term spreads that we’ve been pointing out all week has also stalled, but is still commensurate with a lower FX spot rate.”
“It’s also worth noting that the options market continues to show greater demand for downside protection in EUR/USD, with risk reversals reflecting a growing premium for puts. On the charts, trend support and the 40-day moving average have provided a short-term base in the mid-1.32 area, but we continue to see room for more downside from here. We prefer selling rallies toward the upper 1.32s, although opportunities may be scarce.”
Key quotes
Earlier today, “slightly softer Eurozone CPI receiving little reaction from the currency. The widening in German-US short term spreads that we’ve been pointing out all week has also stalled, but is still commensurate with a lower FX spot rate.”
“It’s also worth noting that the options market continues to show greater demand for downside protection in EUR/USD, with risk reversals reflecting a growing premium for puts. On the charts, trend support and the 40-day moving average have provided a short-term base in the mid-1.32 area, but we continue to see room for more downside from here. We prefer selling rallies toward the upper 1.32s, although opportunities may be scarce.”