Back
12 Mar 2015
EUR/USD long-term negative bias – KBC
FXStreet (Barcelona) - The KBC Bank Research Team, maintains a negative bias on EUR/USD, and note that any counter move from the pair is highly unlikely at current stage, adding that only a big negative surprise from US retail sales will impact the EUR's downslide.
Key Quotes
“Question is how long the self-reinforcing spiral between QE, falling European bond yields and the free fall of the euro will continue. For now, there is no signal that this process is going to stop any time soon.”
“In the US, the retail sales and the jobless claims will be published. The consensus expects a moderate rebound after two months of disappointing sales. Question is whether it will impact markets’ expectations on the path of Fed normalisation.”
“A poor figure might slow the ascent of the dollar, but a very big negative surprise is probably needed to counterbalance the impact from ECB QE on the EUR/USD trend.”
“At some point a counter move on the EUR/USD downtrend will occur, but we don’t see the trigger now.”
“The technical picture for the EUR/USD cross rate turned further negative as the pair dropped below the previous cycle low.1.0078 marks the 76% retracement level (All time low/all-time high).”
“On the topside regaining the 1.0717 area might be a first indication that the decline is losing momentum. The 1.1098 previous low is a first reference short-term.”
“A rebound north of 1.1534 would question the established downtrend. This is very far away.”
“We maintain a LT EUR/USD negative bias, but don’t add exposure at current levels.”
Key Quotes
“Question is how long the self-reinforcing spiral between QE, falling European bond yields and the free fall of the euro will continue. For now, there is no signal that this process is going to stop any time soon.”
“In the US, the retail sales and the jobless claims will be published. The consensus expects a moderate rebound after two months of disappointing sales. Question is whether it will impact markets’ expectations on the path of Fed normalisation.”
“A poor figure might slow the ascent of the dollar, but a very big negative surprise is probably needed to counterbalance the impact from ECB QE on the EUR/USD trend.”
“At some point a counter move on the EUR/USD downtrend will occur, but we don’t see the trigger now.”
“The technical picture for the EUR/USD cross rate turned further negative as the pair dropped below the previous cycle low.1.0078 marks the 76% retracement level (All time low/all-time high).”
“On the topside regaining the 1.0717 area might be a first indication that the decline is losing momentum. The 1.1098 previous low is a first reference short-term.”
“A rebound north of 1.1534 would question the established downtrend. This is very far away.”
“We maintain a LT EUR/USD negative bias, but don’t add exposure at current levels.”