19 Feb 2015
Elevated event risks could prompt more volatile price action in EUR/USD – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, shares the outlook for EUR/USD for the week ahead, and comments on the key event risks for the single currency - Greek debt talks and Yellen's testimony.
Key Quotes
“There are two main event risks in the week ahead which could materially impact EUR/USD direction. The euro will be impacted specifically by ongoing developments in Greece."
“A failure to reach an agreement in the week ahead would likely encourage increased euro selling pressures. However, if an agreement is reached it could prompt a temporary relief rally for the euro.”
“Fed Chair Yellen’s semi-annual testimony will be the main event risk for the US dollar in the week ahead. We expect Fed Chair Yellen to present a more upbeat assessment of the US economy and signal that the Fed remains on course to raise rates from the middle of the year which should help to support a stronger US dollar.”
“Fed Chair Yellen’s testimony will be even more closely scrutinized following the release of the more dovish than expected FOMC minutes which hinted that rate hikes may occur later this year.”
“The elevated event risk heightens uncertainty over the outlook for EUR/USD in the week ahead. We maintain a neutral bias assuming that a deal for Greece will be reached."
“EUR/USD – Neutral Bias – (1.1200-1.1600)”
Key Quotes
“There are two main event risks in the week ahead which could materially impact EUR/USD direction. The euro will be impacted specifically by ongoing developments in Greece."
“A failure to reach an agreement in the week ahead would likely encourage increased euro selling pressures. However, if an agreement is reached it could prompt a temporary relief rally for the euro.”
“Fed Chair Yellen’s semi-annual testimony will be the main event risk for the US dollar in the week ahead. We expect Fed Chair Yellen to present a more upbeat assessment of the US economy and signal that the Fed remains on course to raise rates from the middle of the year which should help to support a stronger US dollar.”
“Fed Chair Yellen’s testimony will be even more closely scrutinized following the release of the more dovish than expected FOMC minutes which hinted that rate hikes may occur later this year.”
“The elevated event risk heightens uncertainty over the outlook for EUR/USD in the week ahead. We maintain a neutral bias assuming that a deal for Greece will be reached."
“EUR/USD – Neutral Bias – (1.1200-1.1600)”