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8 Jan 2015
EUR/USD breaking fresh 9.5 year lows - Scotiabank
FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank noted that the EUR/USD> has broken to fresh 9.5 year lows.
Key Quotes:
"Technically the next levels are psychological support provided by 1.1700 followed by the 2005 low of 1.1640."
"Yesterday’s flash CPI release, disappointing and falling firmly into deflation (‐0.2%y/y), have spurred widespread speculation that the ECB will announce aggressive policy action on January 22nd and enter a broad sovereign bond buying program. This, combined with negative rates, is spurring flows away from EUR and accordingly significant depreciation. We expect EUR to trend lower in both the near and medium‐terms."
"Fundamental data was mixed today, with Eurozone PPI falling more significantly than expected, ‐1.6%y/y, and German factory orders down –2.4%m/m; however Eurozone retail sales were stronger than expected, up 0.6%m/m and 1.5%y/y; while confidence was generally soft. In the current environment the driver of EUR is likely more flow based than data dependent; with the ECB meeting on January 22 the most significant risk."
"EUR/USD short‐term technicals: bearish—signals all warn of ongoing and building EUR downside, with the next level of support at 1.1700 followed by 1.1640 (the 2005 low)."
Key Quotes:
"Technically the next levels are psychological support provided by 1.1700 followed by the 2005 low of 1.1640."
"Yesterday’s flash CPI release, disappointing and falling firmly into deflation (‐0.2%y/y), have spurred widespread speculation that the ECB will announce aggressive policy action on January 22nd and enter a broad sovereign bond buying program. This, combined with negative rates, is spurring flows away from EUR and accordingly significant depreciation. We expect EUR to trend lower in both the near and medium‐terms."
"Fundamental data was mixed today, with Eurozone PPI falling more significantly than expected, ‐1.6%y/y, and German factory orders down –2.4%m/m; however Eurozone retail sales were stronger than expected, up 0.6%m/m and 1.5%y/y; while confidence was generally soft. In the current environment the driver of EUR is likely more flow based than data dependent; with the ECB meeting on January 22 the most significant risk."
"EUR/USD short‐term technicals: bearish—signals all warn of ongoing and building EUR downside, with the next level of support at 1.1700 followed by 1.1640 (the 2005 low)."