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EUR/USD forecast: attention to CPI – Commerzbank and Danske Bank

FXStreet (Edinburgh) - The shared currency is trading on a softer tone vs. the dollar today, although it manages well to keep the trade above the 1.06 handle so far ahead of EMU’s CPI.

Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued the pair “is attempting to recover very near term - the daily RSI has not confirmed recent low, we have a 13 count and a TD perfected set up. This non-confirmation of the down move continues to worry us as we approach major supports, namely 1.0560/20, the 2000-15 support line and April low and also the 1.0457 March low, we favour a near term corrective rebound”.

In addition, Analyst Kristoffer Lomholt at Danske Bank suggested “We do, however, not expect the cross to reach parity and we expect the fundamentally heavily undervalued cross to edge higher over the next year as relative rates lose importance - amid stretched positioning - and as the relative current account difference is now back at 2004-2006 levels (when we last saw significant USD weakness). We target EUR/USD at 1.06 in 6M and 1.16 in 12M”.

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