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What lies ahead of the EUR/USD? – Scotiabank and OCBC Bank

FXStreet (Edinburgh) - The EUR/USD dropped two-big figures post-ECB on Thursday, trading back to levels last seen in mid-July 2013 around the area of 1.2940.

“With the pair cracking the 1.3000 barrier in one fell swoop, we expect investors to pause for breath while awaiting the US labor market numbers (mkt:+225k) in NY. On a structural horizon, little of consequence in terms of support emerges until 1.2875 with immediate downside risks expected from any upside surprises from the US NFP numbers (note the non-manufacturing ISM outperformed expectations at 59.6 in August)”, noted Emmanuel Ng, FX Strategist at OCBC Bank.

In addition, Chief FX Strategist at Scotiabank Camilla Sutton commented, “For EUR, the fundamental developments are negative, particularly when juxtaposed against an increasingly hawkish Fed; however adding further weight to EUR downside has been a shift in flows. Most indicators suggest that equity and fixed income flows are shifting away from the Eurozone and the CFTC reports a large net short EUR position. We hold a year‐end EUR target of 1.30 and a 2015 year‐end target of 1.24”.

EUR/USD drowning around 1.2930

EUR/USD opened the day at 1.2943, and continued to stride lower reaching 1.2921 session low in Asia; it’s currently trading at 1.2937.
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