EUR/USD: news and comments
EUR/USD tested $1.3115 as risk appetite increased on positive news from Italy. However, later in the day the pair eased to $1.3080 as German CPI contracted more than expected. The $1.3100 handle remains a strong resistance for the bulls. Traders remain prudent ahead of the ECB meeting on Thursday.
Westpac: Weak US data and full pace Fed QE encourages demand, but it is hard to see the ECB meeting on Thursday playing EUR-positive. We expect a steady hand, but Draghi’s press conference should cap any bounce to $1.3200, given euro zone’s economic deceleration (including Germany).
Commerzbank: There is no clear direction, but, given the recent failure to overcome 50% Fibo, we remain bearish. Watch the 2013 resistance at $1.3125.
UBS: Resistance is at $1.3110, a break above this would open the more critical $1.3200 and then $1.3230. Support is at $1.2955 and $1.2920 – a breach here would be a bearish development.
Chart. Daily EUR/USD