Currency strategists at Citibank note that the ECB's stance regarding inflation and interest rate rises is not as strong as it was thought that made investors sell the single currency.
The specialists expect the central bank to raise rates next month, but they aren’t sure about the future. In their view, the pair EUR/USD will slide in the near term to $1.43/$1.42.
There’s a rather strong support at $1.4419 (38.25 Fibonacci retracement of the advance from May 23 to June 7). On the upside,...
US dollar went up from the record minimums versus Swiss franc in the 0.8325 area hit at the beginning of the week getting above 0.8400.
Technical analysts at UBS note that USD/CHF upward move was caused by general strengthening of the greenback. In their view, however, the near-term outlook remains bearish as long as US currency is trading below 0.8500.
According to the bank, key support levels are found at 0.8327 and 0.8300.
Chart. H4 USD/CHF
US dollar tried to recover versus Japanese yen on Wednesday from the minimum at 79.79, but failed at 80.45.
The pair USD/JPY returned to the 80.00 area. Technical analysts at Mizuho Corporate Bank note that the crossing MAs give the selling signal. There’s also the potential inverted “flag” and the pressing daily Ichimoku Cloud. The specialists note that the trade volume in summer is low. In their view, taking into account the current conditions it’s possible to assume that the greenback will...
The single currency’s 2-week advance versus the greenback stumbled this week at 1.4700, close to the 78.6% Fibonacci retracement of May's decline.
Technical analysts at Commerzbank note that the short-term outlook for the pair EUR/USD has switched to the downside.
In their view, euro is now poised down to the Ichimoku Cloud support at 1.4295 and then to the recent minimum and the 200-week MA at 1.4007/1.3968.
Chart. Daily EUR/USD
The single currency declined versus the greenback as the European Central Bank is regarded now as less likely to accelerate the interest rate increases this year and the markets expect ECB to hold the borrowing costs after July increase.
In addition, Jean-Claude Trichet rejected the idea of the central bank’s any direct participation in a second bailout for Greece at the press-conference yesterday. The ECB’s head said that it could accept a plan in which investors voluntarily agree to buy Greek...
Analysts at Pacific Investment Management Co., the world’s biggest bond fund, claim that foreigners are questioning US dollar’s role as the world’s reserve currency because of US extremely loose monetary policy as low borrowing rates reduce the nation’s debt burden.
The strategists have once again advised investors to keep away from Treasuries as these securities don’t compensate inflation – the difference between yields on 10-year Treasuries and the year-over-year CPI or the real yield was at...
Analysts at Capital Economics name 3 reasons why they think the Federal Reserve won’t launch the third round of quantitative easing this year.
Firstly, the slowdown of US economy may be caused by the temporary factors such as the surge of commodity prices and the supply disruptions after Japanese earthquake. The specialists underline that Bernanke still expects US growth to pick up. The Fed’s chief gave no hint of more quantitative easing and even admitted that “monetary policy cannot be a...
Technical analysts at Commerzbank claim that Australian dollar must have reached maximum at 1.1010 versus the greenback at the beginning of May. In their view, the pair AUD/USD may weaken in the near-term. The bank’s assumption is found on Aussie’s trade-weighted index that is likely to correct downwards by 3%.
Australia’s currency didn’t manage to overcome the 1.0794 level representing 61.8% Fibonacci retracement of May's decline. The specialists believe that the pair is now poised to test May...