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What’s the sentiment around EUR/USD today? – Commerzbank and Rabobank

FXStreet (Edinburgh) - The USD rally continues to weigh on EUR/USD, now sending it to challenge once again the key support at 1.2500.

In the opinion of Karen Jones, Head of FICC Technical Analysis at Commerzbank, “Key resistance is the 1.2707 downtrend, while capped here the market remains directly offered – only above here points to a retest of the 1.2887 mid October high (not favoured)”.

On the USD-side, Senior Currency Strategist at Rabobank Jane Foley assessed, “While the US economy has little need for strong currency, it is still too early to consider the USD as being too strong… The USD index at 87.15 is not drastically below its average rate since the start of the century (88.83), while on several measures of purchasing power parity EUR/USD is now reasonably well priced while the JPY is now undervalued. For this reason, our revised forecasts for USD appreciation are still measured. We forecast EUR/USD and USD/JPY at 1.21 and 120 in 12 mths respectively”.

European Monetary Union Markit Services PMI came in at 52.3 below forecasts (52.4) in October

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EMU: Services PMI slightly down in October

Eurozone Services PMI fell to 52.3 in October, from 52.4 in September, according to data released today by Markit. Analysts expected no change.
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