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31 Jan 2016
Is EUR/USD headed back to 1.0500? - BBH
FXStreet (Guatemala) - Analysts at Brown Brothers Harriman explained the technical and fundamental conditions surrounding EUR/USD.
Key Quotes:
"The 100-day average has caught the euro's highs since December ECB meeting. It was approached on January 28, and, after an initial lackluster response to the BOJ's move, returned to lower end of its $1.08-$1.10 trading range that has confined the bulk of the activity over the past two months. That Depending on exactly how you draw it, there is a trend line off the Dec ECB meeting low (~$1.0525) and off the Jan 5 low that catches the Jan 21, 22, and 25 lows. Trendline now looks to be just above $1.08.
The technical indicators we use are not very helpful in this extended trading range. However, we suspect that ahead of the US employment, the risk is on the downside. The recent low was set near $1.0775, and $1.0710 area was seen earlier in January. These are the initial targets. Before the ECB disappointment in December, the euro was approaching $1.05.
There is a reasonable chance that the easing that was widely anticipated then will, for all practical purposes be delivered in two installments, one in December and the other in March. This would suggest, barring a poor US employment report, that the euro is likely return to the $1.05 area. "
Key Quotes:
"The 100-day average has caught the euro's highs since December ECB meeting. It was approached on January 28, and, after an initial lackluster response to the BOJ's move, returned to lower end of its $1.08-$1.10 trading range that has confined the bulk of the activity over the past two months. That Depending on exactly how you draw it, there is a trend line off the Dec ECB meeting low (~$1.0525) and off the Jan 5 low that catches the Jan 21, 22, and 25 lows. Trendline now looks to be just above $1.08.
The technical indicators we use are not very helpful in this extended trading range. However, we suspect that ahead of the US employment, the risk is on the downside. The recent low was set near $1.0775, and $1.0710 area was seen earlier in January. These are the initial targets. Before the ECB disappointment in December, the euro was approaching $1.05.
There is a reasonable chance that the easing that was widely anticipated then will, for all practical purposes be delivered in two installments, one in December and the other in March. This would suggest, barring a poor US employment report, that the euro is likely return to the $1.05 area. "