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

The shared currency has managed to put the ECB meeting in the rear window and is currently posting fresh highs in the proximities of 1.3420, buoyed by the likeliness of an agreement from the European Council on the 2014-2020 Budget.

Recalling the last break above the key area of 1.3485/1.3562, Karen Jones, Head of FICC Technical Analysis at Commerzbank commented, “We suspect that this was a false break higher, however key support remains the 1.3125 6 month uptrend and a close below here is required to negate the upmove completely.”

In addition, Derek Halpenny, researcher at BTMU, explains “We may finally get an EU budget deal later today with rumours of a deal based on the first real-term budget cut in EU history. That may help stabilise the single currency which is being undermined in part by some renewed liquidation of yen short positions”.

The bullish outlook on the cross remains intact, according to Strategists G.Yu and G.Berry at the Swiss UBS, arguing, “The strong support is at 1.3354. While this holds, the risk is for resumption of strength. Resistance is at 1.3578 ahead of 1.3711”.

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