EUR/USD: Break of 1.0458 would open the doors for a test of parity - BTMU

Analysts from The Bank of Tokyo-Mitsubishi UFJ, expect the EUR/USD to move with a bearish bias and warned about a potential test of the 1.0000 level if it falls below the March 2015 low. 

Key Quotes: 

“Renewed downward momentum for the euro against the US dollar remains firmly in place in the near-term. EUR/USD is now moving to within touching distance of testing key technical support at 1.0458 which was the cyclical low from March 2015. A break below would open the door for a potential test of parity.”

“The euro is likely to remain offered in the week ahead driven by positioning in the run up to the Italian constitutional referendum on the 4th December. Comments from President Draghi will also be watched closely ahead of the ECB’s policy meeting next month. The US dollar rally has come a long way in a short period of time increasing the risk of a pullback although any dips are likely to be bought. The main US economic data release in the week ahead will be US GDP report for Q3 which is expected to reveal a modest upward revision to growth, and the latest ADP survey for November. We do not expect the reports to alter the market’s view that a December Fed hike is a done deal. US dollar performance will continue to be driven more by expectations for faster tightening in the coming years under President Trump.”