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Forex Flash: EUR/USD still pegged at below 1.3000 by Q4 – Westpac

At the monthly press conference on January 10, ECB president Draghi happily pointed to “a significant improvement in financial market conditions and a broad stabilization of cyclical indicators.” He was quite entitled to do so and we shared the optimism on EUR/USD as it probed as high as 1.3700 on February 1.

However, “we didn’t change our forecast for the EUR/USD to be back below 1.3000 by Q4 2013, given our gloomy view on European growth, concern that sovereign debt troubles would resurface and optimism over the US economy in H2.” Warns Global Strategist Sean Callow at Westpac.

Clearly the past week has not been helpful for EUR’s prospects of returning to the mid-1.3000s. The advance estimates of Eurozone Feb PMIs were disappointing and more potently, Italy’s elections caused much more turmoil than polls had suggested. The strong showing by protest party Five Star produces the prospect of either a very awkward coalition of rival parties with clashing policies or fresh elections with no guarantee of a stable outcome.

Forex: EUR/USD below 1.3125 ahead of German CPI

The EUR/USD is trading lower on Thursday since the early European session tumble after the release of German unemployment data, from 1.3140 down to the base of 1.31. After EMU CPI figures, the pair went for another drop, reaching the 1.3100 line.
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Forex Flash: USD/CHF stalled below 0.9311 allows slide back to 0.9222 - Commerzbank

Commerzbank analysts confirm that the USD/CHF is stalling around the top of its 3 month channel, at 0.9311 currently, and technically they would allow for some weakness towards the near term support line at 0.9222, while above here an upside bias is maintained. “The key resistance and short term target remains the 0.9390 December high. The market needs to clear 0.9390 on a closing basis to restore an upside bias longer term”, wrote analyst Karen Jones, pointing to a reinforced resistance by the 0.9357 55 week ma.
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