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

FXstreet.com (Barcelona) - The shared currency is now trading back into the positive territory on Thursday, hovering over the area of 1.3085/90 and recovering from overnight lows around 1.3040/45.

The Swiss bank UBS keeps its neutral bias on the cross. Strategists G.Yu and G.Berry commented, “Resistance is at 1.3134 ahead of 1.3228. Support is at 1.2978 ahead of 1.2890”.

In addition, Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued that the cross “has met its initial target of 1.3111/30. Current indications are that the market will fail here and we look for the resumption of the down move. Note this upside target zone is a pivot line and directly overhead lies the 1.3147 55 day ma”.

Senior Analyst S.Holbek at Danske Bank suggested “EUR/USD has managed to stay above 1.3050 despite the somewhat hawkish Fed minutes yesterday… We continue to target 1.33 in EUR/USD on a 1-3 month horizon”.

Asian equity markets a mixed bag Thursday

Asian stock indices were completely mixed Thursday, as Japanese markets clearly proved to be the winner today after the BoJ continued to drive the JPY lower. Moreover, overnight the BoJ appears to have taken steps towards calming the front end of the curve in particular by offering up to Y3.5 trn in yen liquidity for 12 months at a mere 10bp.
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Sebastien Galy, Senior FX strategist at Societe Generale notes that Japanese names ended up being net sellers of foreign bonds, rather than buyers as expected.
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