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14 Feb 2014
Flash: EUR/USD closing around 1.37 - Scotiabank
FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank noted the activity around the EUR/USD as it is closing the week around the 1.37 handle.
Key Quotes
"EUR has rallied, flirting with a break above 1.37 and is almost flat year‐to‐ date. Today’s up move was driven by a stronger than expected Q4 GDP release (+0.3%q/q and +0.5%y/y) is encouraging for EUR; with most of today’s EUR rally coming on the back of rising German GDP, up 0.4%q/q."
"President Draghi had noted that the ECB was watching the release of GDP closely; accordingly with a stronger than expected release and increasing confidence in the EM some of the pressure to ease policy has come off the ECB. However we note that the February 24th inflation release combined with yesterday’s ECB Monthly Bulletin, where the Bank highlights that professional forecasters have decreased their expectations for the inflation outlook is likely to keep the ECB notably dovish. There has been limited reaction to news that Italy’s PM Letta will resign."
"EUR/USD short‐term technicals: bullish all signals are in buy territory with support at the 50‐day at 1.3655 and resistance at the January high of 1.3739, followed by the psychological 1.3800."
Key Quotes
"EUR has rallied, flirting with a break above 1.37 and is almost flat year‐to‐ date. Today’s up move was driven by a stronger than expected Q4 GDP release (+0.3%q/q and +0.5%y/y) is encouraging for EUR; with most of today’s EUR rally coming on the back of rising German GDP, up 0.4%q/q."
"President Draghi had noted that the ECB was watching the release of GDP closely; accordingly with a stronger than expected release and increasing confidence in the EM some of the pressure to ease policy has come off the ECB. However we note that the February 24th inflation release combined with yesterday’s ECB Monthly Bulletin, where the Bank highlights that professional forecasters have decreased their expectations for the inflation outlook is likely to keep the ECB notably dovish. There has been limited reaction to news that Italy’s PM Letta will resign."
"EUR/USD short‐term technicals: bullish all signals are in buy territory with support at the 50‐day at 1.3655 and resistance at the January high of 1.3739, followed by the psychological 1.3800."