EUR/USD forecast: eyes on Draghi – Commerzbank and Rabobank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Edinburgh) - The single currency is keeping the buoyant tone alive at the beginning of the week, trading in the mid-1.0800s ahead of PMIs and Draghi’s speech later in the session.

    “The extremely low level of interest rates maintained by the ECB has ensured that the EUR is used as a funding currency for carry trades… While interest rate differentials can drive EUR/USD lower, we expect the downside potential to be moderated by a reluctance to short the EUR/USD. We are forecasting a low at EUR/USD1.04 this year”, suggested Jane Foley, Senior FX Strategist at Rabobank.

    Furthermore, Axel Rudoph, Senior Technical Analyst at Commerbank, noted “Last week’s EUR/USD failure at 1.0968 is bearish, targeting the 1.0776/11 January lows. This failure occurred slightly below tough resistance at 1.1000/1.1060. These are the recent highs and the 200 day ma, the 2014-2016 downtrend and 55 week ma and we view the market as bearish while capped here. Our target remains the 1.0523 recent low”.
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