EUR/USD: risk remains biased to further downside - Scotiabank

By FXstreet.com | July 28, 2014 AAA

FXStreet (Córdoba) - Eric Theoret, Currency Strategist at Scotiabank, notes that the EUR/USD risk remains biased to further downside, given the massive divergence to yield spreads and bearish technical indicators.

Key Quotes



"EUR risk remains biased to further downside, given the massive divergence to yield spreads and the acceleration observed in bearish momentum indicators".



"Friday’s decline also highlights further downside risk to EUR given the negative reaction to Russia-related headlines, a reversal from the typical pattern observed since March. The reaction was likely the result of a focus on the consideration of escalating EU sanctions toward Russia with public officials voicing their support in spite of economic costs".



"Near term risk lies with broader developments, with no high level data scheduled for release before Wednesday".



"Both trend and momentum indicators are suggestive of further downside, however we note that the RSI has entered oversold territory between 20 and 30. Key downside levels include 1.3400 and the November 2013 low at 1.3296".



comments powered by Disqus
Related Forex Analysis
  1. USD/JPY crashes below 106.50, more downside in store
    Forex News

    USD/JPY crashes below 106.50, more downside in store

  2. Trading Video: Is the S&P 500 Rebound, VIX Retreat a Trend or Interlude
    Forex News

    Trading Video: Is the S&P 500 Rebound, VIX Retreat a Trend or Interlude

  3. EUR/USD bulls wake up and drive pair above 1.2800
    Forex News

    EUR/USD bulls wake up and drive pair above 1.2800

  4. Strategy Video: Which is the Better Breakout Candidate - AUDUSD or EURJPY?
    Forex News

    Strategy Video: Which is the Better Breakout Candidate - AUDUSD or EURJPY?

  5. AUD/USD Range Endures With Clearer Cues From Candlesticks Desired
    Forex News

    AUD/USD Range Endures With Clearer Cues From Candlesticks Desired

Trading Center