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24 Aug 2015
EUR/USD unwinding through big levels on 1.14 handle
FXStreet (Guatemala) - EUR/USD is currently trading at 1.1427 with a high of 1.1454 and a low of 1.1368.
EUR/USD has continued on a short-squeeze in a risk-off setting and playing out its funding roll as investors cash out of alternative asset classes and short euro effective positions. The market has been a wild a start and the momentum of the moves are fierce. The euro has not been this high since May of this year and threatens to break the start of the year resistance of the channel between this year's lows of 1.0472 and 1.1650 downtrend of late January.
The catalysts are many, while the dovish FOMC minutes came at a time where the PBoC are devaluing their currency which rings alarm bells and ricochets across the global EM space having large implications in an environment where the Fed may be required to hike interest rates before the year is out, which creates further downside risks for the global financial area and hence, for the mean time, the Federal Reserve can afford to hold back until absolutely appropriate while the economy, for now at least, can enjoy some relief in a weaker greenback as Yellen and members continue to monitor the progress in the US data and the state of global markets.
Busy data week ahead
The week ahead is a busy going to be a busy week for the US with Jackson Hole Symposium (27-29 Aug), although this year's Jackson Hole Symposium is unlikely to be a major market moving event in the noticeable absence of Fed Chair Yellen. We also have Durable Goods Orders (26 Aug) and US GDP (27 Aug) and such revisions to Q2 GDP should be positive and leave a favourable the handoff to Q3 GDP which should be supportive of the greenback. For the EZ, we equally have a number of key data releases with German final 2015Q2 GDP, the August IFO business survey, and August CPI. We already had the headline GDP figure last week at 0.4% q/q, but this coming week's release will put more colour on the numbers.
Technically, 1.1468 and 1.1534 are key resistances ahead of aforementioned key downside levels.
EUR/USD has continued on a short-squeeze in a risk-off setting and playing out its funding roll as investors cash out of alternative asset classes and short euro effective positions. The market has been a wild a start and the momentum of the moves are fierce. The euro has not been this high since May of this year and threatens to break the start of the year resistance of the channel between this year's lows of 1.0472 and 1.1650 downtrend of late January.
The catalysts are many, while the dovish FOMC minutes came at a time where the PBoC are devaluing their currency which rings alarm bells and ricochets across the global EM space having large implications in an environment where the Fed may be required to hike interest rates before the year is out, which creates further downside risks for the global financial area and hence, for the mean time, the Federal Reserve can afford to hold back until absolutely appropriate while the economy, for now at least, can enjoy some relief in a weaker greenback as Yellen and members continue to monitor the progress in the US data and the state of global markets.
Busy data week ahead
The week ahead is a busy going to be a busy week for the US with Jackson Hole Symposium (27-29 Aug), although this year's Jackson Hole Symposium is unlikely to be a major market moving event in the noticeable absence of Fed Chair Yellen. We also have Durable Goods Orders (26 Aug) and US GDP (27 Aug) and such revisions to Q2 GDP should be positive and leave a favourable the handoff to Q3 GDP which should be supportive of the greenback. For the EZ, we equally have a number of key data releases with German final 2015Q2 GDP, the August IFO business survey, and August CPI. We already had the headline GDP figure last week at 0.4% q/q, but this coming week's release will put more colour on the numbers.
Technically, 1.1468 and 1.1534 are key resistances ahead of aforementioned key downside levels.