20 Mar 2015
EUR/USD break below 1.0630/20 to expose 1.04 area – Rabobank
FXStreet (Barcelona) - Jane Foley, Senior Currency Strategist at Rabobank, notes that Yellen’s view on USD strength might have slowed EUR’s decline, but the overall bearish trend remains in place.
Key Quotes
“There has been plenty of speculation this year that the structural and banking reforms taken by other European countries mean that the Eurozone is no longer as susceptible to contagion from talk of a Grexit as it was during the crisis years.”
“Even so it remains our central view that Eurozone politicians are still not prepared to countenance a Greece exit from the system. This view is a common one and, together with the ECB’s huge bond buying plan, it explains the market’s limited reaction to Greek news this year.”
“While there is talk that the latest round of worrying Greek headlines have added to pressure on the EUR, we would attribute EUR/USD’s inability to hold Wednesday night’s better levels as a recognition that while the Fed was less hawkish than expected this week that it still be hiking interest rate sooner or later.”
“While Yellen’s acknowledgement that USD strength is impacting the US economy may slow the pace of the decline in EUR/USD, the trend is still in place. A break below the EUR/USD1.0630/20 support area may put the 1.04 area into the market’s sights.”
Key Quotes
“There has been plenty of speculation this year that the structural and banking reforms taken by other European countries mean that the Eurozone is no longer as susceptible to contagion from talk of a Grexit as it was during the crisis years.”
“Even so it remains our central view that Eurozone politicians are still not prepared to countenance a Greece exit from the system. This view is a common one and, together with the ECB’s huge bond buying plan, it explains the market’s limited reaction to Greek news this year.”
“While there is talk that the latest round of worrying Greek headlines have added to pressure on the EUR, we would attribute EUR/USD’s inability to hold Wednesday night’s better levels as a recognition that while the Fed was less hawkish than expected this week that it still be hiking interest rate sooner or later.”
“While Yellen’s acknowledgement that USD strength is impacting the US economy may slow the pace of the decline in EUR/USD, the trend is still in place. A break below the EUR/USD1.0630/20 support area may put the 1.04 area into the market’s sights.”