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4 Dec 2014
EUR bears own the upper hand – MP
FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis and Research at MarketPulse, notes that EUR currency bears have the upper hand as the EUR/USD pair trades lower after hitting a 27-month low ahead of ECB’s policy meeting.
Key Quotes
“The EUR currency bears own the upper hand as the market plays out the final few-weeks of this year. The single unit has managed to hit fresh 27-month low as it tests below €1.2300 ahead Draghi’s highly touted press conference. Although the odds for fully blown QE have risen amid the weak growth outlook and the prospect of persistently low inflation, dealers note that Draghi needs to provide a very strong easing message in order to keep EUR/USD offered at this time.”
“From a technical perspective, the next key EUR low is at €1.2288 (June 2012) and a break there managed to produce another two-cent drop to €1.2042 rather quickly. If the ECB were to add stimulus today the market will be expecting this as a minimum.”
“Nevertheless, the current market bar for disappointment seems to be rather low. Upsetting the bear positions should be capable of triggering some conveniently “large” stop losses just above the option protected €1.2400 handle. Any funny business from the ECB and bears will be trying to shut the shop door to end the year despite U.S payrolls being on the horizon.”
Key Quotes
“The EUR currency bears own the upper hand as the market plays out the final few-weeks of this year. The single unit has managed to hit fresh 27-month low as it tests below €1.2300 ahead Draghi’s highly touted press conference. Although the odds for fully blown QE have risen amid the weak growth outlook and the prospect of persistently low inflation, dealers note that Draghi needs to provide a very strong easing message in order to keep EUR/USD offered at this time.”
“From a technical perspective, the next key EUR low is at €1.2288 (June 2012) and a break there managed to produce another two-cent drop to €1.2042 rather quickly. If the ECB were to add stimulus today the market will be expecting this as a minimum.”
“Nevertheless, the current market bar for disappointment seems to be rather low. Upsetting the bear positions should be capable of triggering some conveniently “large” stop losses just above the option protected €1.2400 handle. Any funny business from the ECB and bears will be trying to shut the shop door to end the year despite U.S payrolls being on the horizon.”