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8 Apr 2013
Forex Flash: EUR/USD may continue to find support from weak dollar - OCBC Bank
FXstreet.com (Barcelona) - Emmanuel Ng of OCBC Bank feels that EUR/USD may continue to find support from a “weak dollar” story in next few sessions in the wake of the weak US labor market numbers and with short-end riskies also favoring EUR puts less in the past week.
Thus, he feels that prospects of a potential for an ECB loosening in the coming months may be put on the back burner in the near term, although this possibility may serve to cap excessive EUR upside beyond the short term. On the CFTC front, He writes, “Net speculative EUR shorts deepened in the latest week but this effect may be alleviated by the latest US labor market numbers. We continue to remain mildly constructive towards the EUR/USD and the 200-day MA (1.2897) may offer support on dips in the near term.”
Looking to GBP/USD, he adds that the pair shadowed EUR/USD higher on Friday with the pair hurdling above 1.5300 during NY hours following the disappointing US labor market reports and cited position adjustments. He writes, “Net speculative GBP shorts on the CFTC front were cut in the latest week but in this instance, dollar weakness may continue to work in the pound’s favor. As such, if the 55-day MA (1.5342) is breached, a move towards the next key resistance around the 1.5530 area cannot be ruled out.”
Thus, he feels that prospects of a potential for an ECB loosening in the coming months may be put on the back burner in the near term, although this possibility may serve to cap excessive EUR upside beyond the short term. On the CFTC front, He writes, “Net speculative EUR shorts deepened in the latest week but this effect may be alleviated by the latest US labor market numbers. We continue to remain mildly constructive towards the EUR/USD and the 200-day MA (1.2897) may offer support on dips in the near term.”
Looking to GBP/USD, he adds that the pair shadowed EUR/USD higher on Friday with the pair hurdling above 1.5300 during NY hours following the disappointing US labor market reports and cited position adjustments. He writes, “Net speculative GBP shorts on the CFTC front were cut in the latest week but in this instance, dollar weakness may continue to work in the pound’s favor. As such, if the 55-day MA (1.5342) is breached, a move towards the next key resistance around the 1.5530 area cannot be ruled out.”