22 Oct 2013
EUR/USD heading south?
FXstreet.com (London) - EUR/USD has found supply in 1.3790 and is beginning look overbought.
Data today that was two weeks over due for September paints a bleak picture for the US labour market. This married with the battles in Washington puts the tapering agenda on the back-burner and allows the dollar bears a free ride for the time being at least. However, as reported by Report by David Bloom, Global Head of FX Research at RBS, Europe will not want the EUR strength to continue. “What little recovery we have seen in the Eurozone economy has been driven by the swing in net trade. With unemployment likely to remain high, a further revival in exports will be critical to any additional acceleration in overall growth. While the US Federal Reserve delayed its QE3 tapering for fear of the damage being exacted by higher long-term interest rates, Eurozone policymakers will be more concerned about the currency's relentless advance. The Real Effective Exchange Rate (REER) of the EUR has appreciated by an unhelpful 9% in the last year. This is the potential Achilles heel, and will demand a policy response. This could come in many forms, be it rhetoric, a rate cut or renewed liquidity injections by the ECB, and stifling the EUR's rise will be a key part of the strategy”.
EUR/USD Levels
The 20 DMA is 1.3571, the 50 DMA is 1.3425 and the 200 DMA is 1.3204. RSI (14) reads 81.59. Supports are ascending from 1.3598, 1.3615, 1.3640, 1.3665, 1.3690, 1.3711 and 1.3747. Spot is 1.3783 and after1.3800 comes next resistance at 1.3815.
Data today that was two weeks over due for September paints a bleak picture for the US labour market. This married with the battles in Washington puts the tapering agenda on the back-burner and allows the dollar bears a free ride for the time being at least. However, as reported by Report by David Bloom, Global Head of FX Research at RBS, Europe will not want the EUR strength to continue. “What little recovery we have seen in the Eurozone economy has been driven by the swing in net trade. With unemployment likely to remain high, a further revival in exports will be critical to any additional acceleration in overall growth. While the US Federal Reserve delayed its QE3 tapering for fear of the damage being exacted by higher long-term interest rates, Eurozone policymakers will be more concerned about the currency's relentless advance. The Real Effective Exchange Rate (REER) of the EUR has appreciated by an unhelpful 9% in the last year. This is the potential Achilles heel, and will demand a policy response. This could come in many forms, be it rhetoric, a rate cut or renewed liquidity injections by the ECB, and stifling the EUR's rise will be a key part of the strategy”.
EUR/USD Levels
The 20 DMA is 1.3571, the 50 DMA is 1.3425 and the 200 DMA is 1.3204. RSI (14) reads 81.59. Supports are ascending from 1.3598, 1.3615, 1.3640, 1.3665, 1.3690, 1.3711 and 1.3747. Spot is 1.3783 and after1.3800 comes next resistance at 1.3815.