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Forex Flash: What can we expect of EUR/USD? – Commerzbank and UBS

FXstreet.com (Barcelona) - The sentiment around the single currency remains depressed on Thursday, with the cross hovering over 1.2900 after poor PMI data from the euro zone dragged the euro to the area of 1.2880. The shared currency posted no reaction after the well-received Spanish bond auctions, as Cyprus woes continue to weight on the EUR.

“EUR/USD is to further bounce off Tuesday’s low at 1.2844 and now targets the minor psychological 1.3000 level. If bettered, the two-month downtrend channel resistance line at 1.3026 will be in focus as well. This should cap with the next higher 1.3107 Friday high on a daily New York closing basis, however”, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank. The expert added that while the cross trades below these levels, the bearish bias would prevail.
Furthermore, G.Yu and G.Berry, Strategists at UBS, keep the bearish perspective on the cross, saying “Any upside will be limited as bear trend persists. Resistance at 1.2996 ahead of 1.3107 – which should hold. Support is at 1.2844 ahead of 1.2662”

Forex Flash: EUR/USD targets 1.3000 - Commerzbank

The EUR/USD is now targeting the minor psychological level at 1.3000 and, “if bettered, the two month downtrend channel resistance line at 1.3026 will be in focus as well”, according to Commerzbank analysts. “This should cap with the next higher 1.3107 Friday high on a daily New York closing basis, however. While this is the case we will retain our medium term bearish forecast”, wrote analyst Karen Jones, pointing to downside targets at 1.2679/61 (61.8% Fibonacci retracement of the July-to-January rise and the November 2012 low). “Longer term we target the 78.6% Fibonacci retracement at 1.2400 and then 1.2042, the 2012 low”, she added.
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Forex Flash: GBP/USD may extend upside to 1.5340 before longer term drop – Commerzbank

Commerzbank analysts see the scope for 1.5199/1.5223 resistance area (late February and early March highs) if the GBP/USD stays above Wednesday’s 1.5028 low. “The 2013 resistance line at 1.5281 and further up the February 22 high at 1.5321 as well as the breached one year resistance line at 1.5340 may also be reached in the days to come but should then cap”, wrote analyst Karen Jones, expecting then a move back to the 1.5000 region in the weeks to come. “We believe that the longer term down move has further to run and view the current advance as a short term correction only. Longer term we look for losses to 1.4229, the 2010 low”, she added.
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