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Forex Flash: EUR/USD came off Friday highs post Weidmann comments - OCBC Bank

FXstreet.com (Barcelona) - Emmanuel Ng of OCBC Bank notes that EUR/USD came off intraday highs on Friday after the ECB´s Weidmann indicated that interest rates are at an appropriate level.

Over the weekend he adds that the re-election of the President in Italy may also prove supportive for EUR at the onset of the week amid expectations for a new government within the week. Apart from the PMI´s, he feels that the German Ifo on Wednesday may prove to be pivotal for EUR, with markets continuing to toy with the idea of further rate cuts. On the CFTC front, he writes, “net speculative EUR shorts were pared significantly in the latest week, partially in line with the pair’s short lived surge towards the 1.3200 neighborhood during the week. In the interim however, we stay constructive on the pair, with the 55-day MA (1.3090) providing a short term anchor for the pair.

Looking to GBP/USD, he notes that the Fitch rating downgrade may continue to serve as a grim reminder of the uncertain macro prospects surrounding the UK economy. On the CFTC front, he notes that net speculative GBP shorts moderated in the latest week and the pair may be in danger of losing its hold on the 55-day MA (1.5253) and a dip towards 1.5200 may be in store intra-day. He writes, “Multisession, any prolonged negativity risks a move towards 1.5110 this week.”

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