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21 Apr 2015
EUR/USD could revisit 1.0500 – FXStreet
FXStreet (Barcelona) - FXStreet Editor and Analyst, Omkar Godbole, views that EUR/USD is likely to drop to 1.0500 levels and lower if Greece agreement talks fail in the Friday’s Eurogroup meeting.
Key Quotes
“The EUR/USD pair has witnessed extremely high volatility since the beginning of the current month. The pair fell for five straight sessions in the first week of April, before rising for four straight sessions last week. The latest rebound witnessed in the last week stalled at 1.0847, as the US dollar began a comeback on an uptick in the core inflation figures.”
“The pair fell to a low of 1.0658 earlier today, before recovering marginally to trade at 1.0688 levels. Going ahead, I believe the area around 1.0850 is likely to act as an interim top in the pair.”
“The EUR should continue to weaken right till the first week of May, especially if the April 24 Greece talks fail. The pair could extend the losses to 1.05 levels, while the doors could be opened for further losses in case the Greece situation worsens.”
“The weakness in the long-end yields makes EUR less attractive as a growth currency, however, so long as the Greece issue persists, it is highly unlikely that the currency would act like a safe haven asset. Moreover, the Japanese benchmark yields are now higher than those in Germany.”
“Thus, even the prospects of EUR/USD finding support from the rise in EUR/JPY (in case of risk-on event) are lower.”
“Given the worsening German-US yield spread, the EUR/USD is likely to remain under pressure. Greek issue would only worsen the yield spread.”
Key Quotes
“The EUR/USD pair has witnessed extremely high volatility since the beginning of the current month. The pair fell for five straight sessions in the first week of April, before rising for four straight sessions last week. The latest rebound witnessed in the last week stalled at 1.0847, as the US dollar began a comeback on an uptick in the core inflation figures.”
“The pair fell to a low of 1.0658 earlier today, before recovering marginally to trade at 1.0688 levels. Going ahead, I believe the area around 1.0850 is likely to act as an interim top in the pair.”
“The EUR should continue to weaken right till the first week of May, especially if the April 24 Greece talks fail. The pair could extend the losses to 1.05 levels, while the doors could be opened for further losses in case the Greece situation worsens.”
“The weakness in the long-end yields makes EUR less attractive as a growth currency, however, so long as the Greece issue persists, it is highly unlikely that the currency would act like a safe haven asset. Moreover, the Japanese benchmark yields are now higher than those in Germany.”
“Thus, even the prospects of EUR/USD finding support from the rise in EUR/JPY (in case of risk-on event) are lower.”
“Given the worsening German-US yield spread, the EUR/USD is likely to remain under pressure. Greek issue would only worsen the yield spread.”