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Forex: EUR/USD remains above 1.2850; Bears keep the tone

FXstreet.com (San Francisco) - Despite the Greenback was trading lower against its majors competitors, the EUR/USD remained moving sideways as the Euro doesn't have enough punch on the back of the Cypriot crisis and the Dijsselbloem statements on templates, Cyprus, savings and other reflexions.

The EUR/USD traded sideways on Tuesday with the pair moving between 1.2840 and 1.2880. The pair closed 0.08% positive on the day. The mood is consolidation after the Monday's declines but it is happening because the Dollar breather or the Euro weakness? Nevertheless, the Cyprus situation is capping the single currency.

Meanwhile, market is concerned on the Banks' opening on Thursday as Cyprus could experience a money overflow. "As of now, banks in the country will remained closed until Thursday, as authorities fight against the clock to prevent a bank run once they open," comments FXstreet.com analyst Valeria Bednarik.

Heat Map euro dollar

"Short term however, the pair maintains a neutral stance according to the hourly chart, with price around 20 SMA that lost the bearish momentum and turned flat, and indicators hovering around their midlines. In bigger time frames bias remains to the downside, although a break below recent lows around 1.2825 is required to confirm the movement. "

On the wider chart, RBS' analyst Greg Gibbs continues "to favour more downside in the EUR, and continue to see risks of some contagion to global markets, although there is clearly a higher hurdle for this to hurt global investor confidence. Today we see topside for the EUR like to be limited to around 1.29 and look for a further decline towards 1.26 in coming sessions”.

Strategist Camilla Sutton at Scotiabank suggests, “Looking ahead, problems within Europe are likely to subject deposit and bond holders to bearing an increasing burden, shifting the risks of these investments”. Sutton agrees with Gibbs as she says that “accordingly EUR is weak on all measures, and outflows are likely to continue… We expect EUR to trend lower and hold a year-end target of 1.27”.

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