26 Nov 2015
EUR/USD forecast: consolidative above 1.06 – Commerzbank and OCBC
FXStreet (Edinburgh) - After hitting fresh 7-month lows in the vicinity of 1.0560 on Wednesday, the pair has managed to retake the 1.06 mark and is now consolidating in the 1.0620/25 band.
Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued the pair “saw another aggressive down day but once again the daily RSI has diverged. This non-confirmation of the down move continues to worry us as we approach major supports, namely the 1.0560/20, the 2000-15 support line and April low and also the 1.0457 March low, where we would expect to see some profit taking”.
In addition, Senior Analyst at Danske Bank Sverre Holbek, suggested “market expectations continue to build around the ECB meeting and with the front end pricing of 16bp worth of cuts for December the downside risk to EUR/USD has naturally become lower - especially given the stretched level of bearish bets. Our short-term financial model has 1.07 as the current fair value estimate for EUR/USD”.
Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued the pair “saw another aggressive down day but once again the daily RSI has diverged. This non-confirmation of the down move continues to worry us as we approach major supports, namely the 1.0560/20, the 2000-15 support line and April low and also the 1.0457 March low, where we would expect to see some profit taking”.
In addition, Senior Analyst at Danske Bank Sverre Holbek, suggested “market expectations continue to build around the ECB meeting and with the front end pricing of 16bp worth of cuts for December the downside risk to EUR/USD has naturally become lower - especially given the stretched level of bearish bets. Our short-term financial model has 1.07 as the current fair value estimate for EUR/USD”.