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3 Jun 2014
EUR/USD downside momentum fading - Scotiabank
FXStreet (Córdoba) - Camilla Sutton, analyst at Scotiabank notes that the EUR’s resilience to the weak CPI release sums up well how the market has priced in the outlook for the ECB policy decision.
Key Quotes
“EUR is up 0.1% and surprisingly strong, considering the disappointing flash CPI release that has both core and headline CPI falling back to their March lows. Headline fell back to 0.5%y/y while core dropped to 0.7%y/y. Accordingly, disinflationary pressures continue to build, puƫng significant pressure on the ECB to act more boldly than what the market is currently pricing in”.
“EUR’s resilience to the release sums up well how the market has priced in the outlook for the ECB policy decision”.
“EURUSD short‐term technicals: bearish but downside momentum is fading; however all signals still warn of downside risk and spot has so far failed to break sustainably above the 200‐day MA of 1.3646. Accordingly for near‐term traders we favour short EUR positions, even in light of the resilience after the release of disappointing flash CPI”.
Key Quotes
“EUR is up 0.1% and surprisingly strong, considering the disappointing flash CPI release that has both core and headline CPI falling back to their March lows. Headline fell back to 0.5%y/y while core dropped to 0.7%y/y. Accordingly, disinflationary pressures continue to build, puƫng significant pressure on the ECB to act more boldly than what the market is currently pricing in”.
“EUR’s resilience to the release sums up well how the market has priced in the outlook for the ECB policy decision”.
“EURUSD short‐term technicals: bearish but downside momentum is fading; however all signals still warn of downside risk and spot has so far failed to break sustainably above the 200‐day MA of 1.3646. Accordingly for near‐term traders we favour short EUR positions, even in light of the resilience after the release of disappointing flash CPI”.