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May 9, 2013
Forex Flash: EUR/USD faces headwinds, sustained upleg difficult – Westpac
FXstreet.com (Barcelona) - In terms of noteworthy data releases, the upcoming May German ZEW (Tue) likely to firm, given ongoing decline in EZ stress indicators. Q1 German GDP should match expectations for a 0.3% rise given stronger IP data late in the quarter.
According to Global FX Strategist Sean Callow at Westpac, “We prefer to stand aside here and sell into the EUR/USD 1.3250-1.3300. Stronger German factory orders and IP data make weak foundations for a sustained EUR upleg – March was the coldest in 25 years with IP gains led by “energy output”, PMI data has been much weaker and soft data outside of Germany keeps the case for another potential ECB rate cut alive.”
“The EUR’s next downleg might need to await the advance May PMI data (due late in May). In particular, 131.00 is proving formidable resistance in EUR/JPY and favor selling EUR/GBP into 0.8550-0.86 if seen.” Callow adds.
According to Global FX Strategist Sean Callow at Westpac, “We prefer to stand aside here and sell into the EUR/USD 1.3250-1.3300. Stronger German factory orders and IP data make weak foundations for a sustained EUR upleg – March was the coldest in 25 years with IP gains led by “energy output”, PMI data has been much weaker and soft data outside of Germany keeps the case for another potential ECB rate cut alive.”
“The EUR’s next downleg might need to await the advance May PMI data (due late in May). In particular, 131.00 is proving formidable resistance in EUR/JPY and favor selling EUR/GBP into 0.8550-0.86 if seen.” Callow adds.