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EUR/USD forecast: caution ahead of ECB – Commerzbank and OCBC

FXStreet (Edinburgh) - EUR/USD keeps the consolidative pattern following the sell off at the beginning of the week, navigating the 1.1330/20 band ahead of the European open.

Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued spot “failed last week at the 1.1440/72 band (May, June and September highs, the 55 week ma and the 2014-2015 downtrend) and has started to erode 1.1330 which should be enough to trigger losses to the 55 day ma at 1.1232 and the September lows at 1.1105/1.1088. The intraday Elliott counts are contradictory but and we will re-sell on rallies”.

In the same line, FX Strategist at OCBC Bank Emmanuel Ng added “Expect all eyes to be on the ECB’s Draghi on Thursday despite the ECB’s Noyer stating on Monday that the QE program is “well calibrated”. Note the potential for markets to fade near term upticks in the interim, although the 55-day MA (1.1232) and 1.1260 may lend support on downside tests and where bids may emerge”.

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