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EUR/USD bounces at 1.2750; short term bullish, while long term bearish

FXStreet (San Francisco) - EUR/USD's rejection from 1.2790 found support at 1.2750 where the pair bounced back to trade around 1.2780.

Currently, EUR/USD is trading at 1.2775, up 0.11% on the day, having posted a daily high at 1.2790 and low at 1.2731. EUR/USD spot is in overbought territory according to the hourly FXStreet OB/OS Index, while the FXStreet Trend Index is slightly bullish.

EUR/USD sentiment

In the short term, Valeria Bednarik comments that "the EUR/USD hourly chart shows price pressuring the daily high, also static Fibonacci resistance at 1.2780, as per being the 23.6% retracement of the 1.37/1.25 bearish run."

However, the long term shows a different picture according to Morgan Stanley, the current USD bearish de-positioning is ready to change into USD supportive repatriation. "The underperformance of EUR-denominated assets suggests that real-money accounts have remained on the EUR selling side."

In a recent article, eFXnews points out that "MS maintains a short EUR/USD position from 1.28" with a limit order at 1.2950.

"Soon, we expect USD bearish de-positioning to be replaced by USD supportive repatriation," affirms Morgan Stanley.

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