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Forex Flash: What lies ahead of the EUR/USD? – Commerzbank, BTMU and UBS

FXstreet.com (Barcelona) - The bloc currency is hovering over the key mark of 1.2800 on Wednesday, trading in a soft tone ahead of the ECB gathering due tomorrow.

“The market remains directly offered intraday below the 1.2931 resistance line. Longer term we target the 78.6% Fibonacci retracement at 1.2400 and then 1.2042, the 2012 low”, suggested Karen Jones – Head of FICC Technical Analysis at Commerzbank – following another failed attempt to break above the area of 1.2880/90 (200-day moving average).

Against the backdrop of the ECB meeting, Derek Halpenny, Analyst at BTMU, commented, “We do not expect any change in monetary stance and also expect President Draghi to state clearly the ECB view that Cyprus was very unique and that type of banking sector bailout deal would not be repeated elsewhere in the euro-zone”.

G.Yu and G.Berry, Strategists at UBS confirm the bank’s bearish outlook on the cross, saying, “As bearish trend persists, focus is on initial support at 1.2751, a break below this would extend weakness to 1.2662. Resistance at 1.2900”.

Forex Flash: EUR/USD immediate bias negative on course for 1.2679/61 - Commerzbank

The EUR/USD maintains an immediate negative bias for having rallied towards and again been rejected by its 200 day MA, at 1.2890. ”It remains on course for 1.2679/61, this is the 61.8% Fibonacci retracement of the July-to-January rise and the November 2012 low”, wrote analyst Karen Jones, expecting this to hold the initial test and allow for some profit taking here. “The market remains directly offered intraday below the 1.2931 resistance line. Longer term we target the 78.6% Fibonacci retracement at 1.2400 and then 1.2042, the 2012 low”, Jones added, pointing to 1.2931 resistance ahead of last week’s high at 1.3050 which in turn guards 1.3100/80 (“while capped here a negative bias is entrenched”).
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Forex: EUR/USD keeps the red around 1.2795/1.2800

The shared currency seems to be carving a consolidation pattern ahead of tomorrow’s ECB gathering in the vicinity of 1.2790/1.2800, in a context dominated by the risk aversion so far...
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