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Credit Agricole expects EUR/USD near-term pullback to 1.28 - eFXnews

FXStreet (Łódź) - The eFXnews team comment that Credit Agricole sees EUR/USD rising towards the 1.28 area, despite the recent declines.

Key quotes

"Three data releases weighed on EUR overnight: ZEW, industrial output and inflation."

"First, the German ZEW collapsed, dropping to 3.2 from 25.4 vs. 15.0 expected – a three standard deviation miss. At the same time the forward looking expectations component fell for the first since 2012."

"Second, EZ industrial output also missed expectations. More worrying, German weakness drove the headline miss."

"Third, inflation data from Spain, Italy and France also missed expectations."

"Also in response to the recent moderation in data Germany’s Economy Ministry slashed growth estimates for 2014 and 2015. This follows the move last week by an influential German think-thank that cut its German growth forecasts."

"As a result, EUR is broadly weaker and US rates are following European yields lower. The US-year yield marked a new 16-month low at 2.19% - consistent with the weaker global growth outlook. EUR remains above 1.25 (the recent multi-year low) and a key source of support."

"While we remain long-term EUR bears, we look for a pullback in the near-term near the 1.28 level, which is consistent with short-term fundamentals."

'This content has been provided under specific arrangement with eFXnews.'

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