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Euro stabilizes at lower levels – BTMU

FXStreet (Barcelona) - According to Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, the weak but less negative dataflow from the euro-zone is offering support for the euro to stabilize.

Key Quotes

“The euro has continued to stabilize against the US dollar over the last week trading largely within a narrow range between the 1.2400 and 1.2600-levels. The economic data flow from the euro-zone although still weak is becoming less negative which is offering some support for the euro.”

“After falling sharply between May and September, the euro is now awaiting a fresh catalyst to trigger further euro weakness. The increasingly elevated level of short euro positions may be acting to dampen further euro downside in the near-term, and could support a temporary corrective rebound.”

“Similarly long speculative US dollar positions are also becoming increasingly elevated which may be acting to dampen further upside in the near-term.”

"The economic data flow from the US continues to remain supportive for a stronger US dollar, but it was notable that the US dollar failed to sustain gains following the stronger than expected US retail sales report for October.“

"The US dollar is likely to remain sensitive to weaker than expected inflation readings in the near -term which could allow greater scope for the Fed to delay raising rates for longer.”

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