6 Jan 2016
EUR/USD forecast: all eyes on the FOMC – Commerzbank and Danske Bank
FXStreet (Edinburgh) - The single currency remains on the defensive on Wednesday, navigating the low-1.0700s ahead of the ADP report and FOMC minutes due later in the US economy.
Karen Jones, Head of FICC Technical Analysis at Commerzbank, noted the pair “has eroded key nearby support at 1.10819/1.0796 – this represented the May low, the July low, the 7 th December low and the break down through here is expected to trigger another leg lower to the 1.0523 recent low (favoured). Currently Intraday rallies are indicated to fail circa 1.0830, 1.0955”.
Furthermore, Senior Analyst at Danske Bank Jens Pedersen suggested, “EUR/USD continued to drop yesterday, falling below the 1.08 mark again. We note that the cross has been under pressure on two consecutive days of souring risk appetite, which contrasts (likely due to the geopolitical nature of the latter) with the change seen during the course of 2015 when the single currency was increasingly perceived to be a funding currency and witnessed a negative correlation with risk appetite”.
Karen Jones, Head of FICC Technical Analysis at Commerzbank, noted the pair “has eroded key nearby support at 1.10819/1.0796 – this represented the May low, the July low, the 7 th December low and the break down through here is expected to trigger another leg lower to the 1.0523 recent low (favoured). Currently Intraday rallies are indicated to fail circa 1.0830, 1.0955”.
Furthermore, Senior Analyst at Danske Bank Jens Pedersen suggested, “EUR/USD continued to drop yesterday, falling below the 1.08 mark again. We note that the cross has been under pressure on two consecutive days of souring risk appetite, which contrasts (likely due to the geopolitical nature of the latter) with the change seen during the course of 2015 when the single currency was increasingly perceived to be a funding currency and witnessed a negative correlation with risk appetite”.