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ECB effective ex rate, protected by a double bottom – SG

FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Research at Societe Generale notes EUR/USD meandering as we start European PMI week.

Key Quotes

“The chart of the Euro’s effective exchange rate is inspired by Nordea’s Aureija Augulyte, who pointed out the double-bottom formed since the start of October.”

“The left hand low on the chart was reached at the start of October, when strong US employment data took 2-year dollar swap rates above 80bp and it may take something similar to trigger a break. I can’t see that coming from the Empire Manufacturing or industrial production data today.”

“FOMC Minutes on Wednesday will be interesting but the FOMC needs to persuade us to take its ‘dots’ much more seriously before we see EUR/USD break lower.”

“As for the European data, expectations are low and our economists look for a bounce in the PMIs”

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