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- EUR/USD: Room for the rebound to extend towards 200-DMA at 1.1680 – MUFG
EUR/USD: Room for the rebound to extend towards 200-DMA at 1.1680 – MUFG
Sharp EUR rebound threatens to break downtrend in place since the start of last year. Economists at MUFG Bank see room for EUR strength to extend further in the near-term.
ECB puts in place important bullish pivot point for the EUR
“The price action is threatening to bring an end to the bearish trend that has been in place for the EUR since the start of last year.”
“The latest ECB policy meeting could prove to be an important pivot point for the EUR. We are more confident now that the lows are in place against the USD and GBP at 1.1121 and 0.8285 respectively.”
“We now expect market participants to pare back short EUR funding positions in light of the ECB’s updated policy guidance which will help the EUR to rebound from undervalued levels. As the ECB has not raised rates since 2011, there is a risk of outsized upward moves in the EUR and euro-rate markets. It should favour higher EUR volatility as well.”
“Our initial targets on the topside for EUR/USD and EUR/GBP are provided by their 200-day moving averages which come in at around 1.1680 and 0.8520 respectively.”
See: EUR/USD has the 1.1480/00 zone in its crosshairs – OCBC
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