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EUR/USD forecast: still waiting for a catalyst – Commerzbank and Danske Bank

FXStreet (Edinburgh) - The single currency keeps recovering ground from recent lows against the greenback, with EUR/USD meandering around 1.0770/80 so far.

Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued the pair’s “consolidation is tepid at best and the outlook remains negative. Very near term it is corrective and we would allow for potential for a 1.0845/1.0900 move ahead of the next leg lower. Beyond this the market is under pressure following its recent break below the May and July lows at 1.0819/08. The loss of this support has opened the way for further losses to the 1.0520, the April low and the 1.0457 March low”.

Furthermore, Chief Analyst at Danske Bank Allan von Mehren added “Speculative bearish EUR/USD bets have probably reached stretched levels suggesting that momentum in EUR/USD could remain weak for a while as markets consolidate. However, as was seen during the December 2014 to March 2015 decline in EUR/USD, the cross sometimes takes a breather and then falls sharply again. Overall risks are still skewed to the downside for EUR/USD ahead of the FOMC meeting on 16 December”.

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