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21 Oct 2014
EUR/USD keeps falling, 1.2740 on sight
FXStreet (Edinburgh) - The weakness around the EUR accelerates on Tuesday, dragging EUR/USD back to the mid-1.2700s.
EUR/USD hurt by ECB speculations
Spot keeps depreciating following the recent market chatter hinting at the possibility that the ECB could buy corporate bonds in the secondary market within its asset purchase programme, starting in December. Of course, the EUR tool a hit and is currently giving away weekly gains although buyers seem to be clustered around the mid-1.2700s, somehow limiting the downside. Stephen Gallo, European Head FX Strategy at BMO, assessed, “ The USD broadly benefitted from the ECB headlines, particularly vs. the EUR & JPY. This makes sense intuitively: if the ECB’s balance sheet can stabilise bond markets and other asset prices, then macro economic divergence trades can reassert themselves and the Fed can proceed with policy normalisation more smoothly”.
EUR/USD key levels
As of writing the pair is down 0.35% at 1.2754 facing the immediate support at 1.2731 (low Oct.20) followed by 1.2712 (21-d MA) and then 1.2705 (low Oct.16). On the upside, a break above 1.2838 (high Oct.21) would open the door to 1.2845 (high Oct.16) and finally 1.2887 (high Oct.15).
EUR/USD hurt by ECB speculations
Spot keeps depreciating following the recent market chatter hinting at the possibility that the ECB could buy corporate bonds in the secondary market within its asset purchase programme, starting in December. Of course, the EUR tool a hit and is currently giving away weekly gains although buyers seem to be clustered around the mid-1.2700s, somehow limiting the downside. Stephen Gallo, European Head FX Strategy at BMO, assessed, “ The USD broadly benefitted from the ECB headlines, particularly vs. the EUR & JPY. This makes sense intuitively: if the ECB’s balance sheet can stabilise bond markets and other asset prices, then macro economic divergence trades can reassert themselves and the Fed can proceed with policy normalisation more smoothly”.
EUR/USD key levels
As of writing the pair is down 0.35% at 1.2754 facing the immediate support at 1.2731 (low Oct.20) followed by 1.2712 (21-d MA) and then 1.2705 (low Oct.16). On the upside, a break above 1.2838 (high Oct.21) would open the door to 1.2845 (high Oct.16) and finally 1.2887 (high Oct.15).