EUR/USD: talks about the top
EUR/USD failed to close above $1.3400 on Friday. There’s MACD divergence on the daily chart. Momentum is turning negative after the currency climbed to $1.3452 on Aug. 20, says Bloomberg. The news agency also reports that options traders are the most bearish on EUR/USD in 7 weeks. Analysts at the major banks also sound quite bearish.
Mizuho: “There’s a gap in monetary policy between the US and Europe. Despite some positive signs in economic data of late, it’s too early to discuss the reduction of monetary easing, and that will cap the euro’s upside. EUR/USD will fall to $1.30 in the next 2 months.”
Commerzbank: “EUR/USD is already topping out and a decline below $1.3307 will add evidence to this. Euro may reach about $1.28 in 1-3 months.”
BNZ: “The EUR’s failed attempts at the $1.34 level that we’ve seen this week set the scene for a move back toward the bottom end of the recent range. If we get confirmation that Fed tapering is happening in September, I suspect that will be the missing ingredient for euro weakness, and we’ll see that downtrend kick off.”