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30 Sep 2013
EUR/USD, potential toward, and possibly above $1.37 - BBH
FXstreet.com (Barcelona) - While Marc Chandler, Global Head of Currency Strategy at BBH, expects a deterioration in both political and economical fronts in the euro area, which should potentially support a EUR/USD short, he still foresee further dollar weakness to continue in the near future until such weaker EUR/USD prospects materialize.
Key Quotes
"The Dollar Index is poised to fall through the 80.00 level and this suggests potential toward 78.70 initially, which corresponds to a 50% retracement of the rally off the May 2011 lows. It also corresponds to a bit of shelf formed by repeated tests since the first quarter last year. Initial resistance is seen near 80.60, while a move above 81.00 would take the downside pressure off."
"This bearish view of the Dollar Index is the mirror image of the constructive technical view of the euro. After spiking higher in response to the Fed's decision, the euro has been consolidating and appearing to be carving out a pennant or flag pattern."
"Such a pattern is bullish and suggests potential toward, and possibly above the year's high set in early Feb just above $1.37. A break below $1.3450 would be the first technical sign of a potential top, though it may require a move below $1.3400 to be convincing."
Key Quotes
"The Dollar Index is poised to fall through the 80.00 level and this suggests potential toward 78.70 initially, which corresponds to a 50% retracement of the rally off the May 2011 lows. It also corresponds to a bit of shelf formed by repeated tests since the first quarter last year. Initial resistance is seen near 80.60, while a move above 81.00 would take the downside pressure off."
"This bearish view of the Dollar Index is the mirror image of the constructive technical view of the euro. After spiking higher in response to the Fed's decision, the euro has been consolidating and appearing to be carving out a pennant or flag pattern."
"Such a pattern is bullish and suggests potential toward, and possibly above the year's high set in early Feb just above $1.37. A break below $1.3450 would be the first technical sign of a potential top, though it may require a move below $1.3400 to be convincing."