Positive views on EUR
EUR/USD has once again reached $1.3400.
Credit Agricole says that there’s scope for EUR/USD to trend back to $1.3600 and above over the coming few weeks. The specialists justify their assumption by several reasons:
- The ECB’s forward guidance is unlikely to cap medium- and long term rates if incoming growth data continue to improve.
- The market has already priced in the scenario, according to which the Federal Reserve will start tapering QE in September, so US yields have little scope for further growth.
- Watch German GDP and business activity data as well as the release of the FOMC minutes from the July meeting.
ANZ points out that there are some signs that economic growth in the euro area is starting to stabilize. “Recent gains continue to appear relatively impulsive and could suggest an early and full test of broader range resistance in the $1.3700 area,” says the bank.
Commerzbank says that the increase above June high at $1.3415 would suggest ongoing strength to 1.3500/20 where they expect euro to falter. “Only a drop through the 1.3208/1.3188 support area will alleviate upside pressure,” says the bank.