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Forex: The Euro says enough and recover the 1.3000 place; What next?

The EUR/USD completed a 800 pips decline from the 16-month high of 1.3710 reached February 1st to post today a fresh 3-month low at 1.2910. The pair has retraced all its YTD gains and has posted 1.66% losses in 2013. The pair failed to break below the 1.2900 frontier and recovered the 1.3000 print, but the picture is open yet.

The Pound gave signs of life and finally the GBP/USD bounced from 1.48 highs to trade above the 1.5000 and test the 1.5100 level. The Cable joined risk aversion but there wasn't clear catalyst for the movement. Commodity currencies advanced on firm employment data from Australia and the US.

The USD/CAD collapsed to March lows at 1.0210 on the back of news from a new refinery in the Canadian west coast that should propelled the Canadian national account by $1.6 billion per month.

What to come in the EUR/USD panorama?

The euro printed a yearly low at on Thursday suggesting a greater risk that the Feb/Mar bear trend extends, but the EUR/USD failed to break below the 1.2900 level and the pair bounced back to regain the 1.3000 level where the pair is currently pricing.

With 0.30%b daily gains, the MACD, Momentum and CCI remains bearish in the 1-day chart. The EUR/USD ia advancing 0.08% on the week but declining 3.53% on the month. According to the HBSC team, the USD is a 'heads I win, tails you lose' case. HSBC expects the USD rally "to continue in the short term."

According to the bank, "there appears to be an asymmetric bias where both strong positive and negative data could cause the USD to strengthen." However, any short term rally in the USD is unlikely to be sustained." The bank's forecast is the EUR/USD March ending march at 1.30. The 3-month price at 1.296 and the 1 year forecast at 1.2710.

On the other side, the UBS analyst team targets the EUR/USD to fall to 1.2660 as they open a new short EUR recommendation at 1.3010. "Our stop-loss on that position is 1.32", they say. "This position should profit from increasing confidence in the US economy".

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