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23 Jan 2015
EUR near-term risks remain politics – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, is of the opinion that near-term risks for the EUR remain politics, with the Greek elections this weekend being the most risky, and further adds that EUR/USD attaining parity is becoming increasingly realistic.
Key Quotes
“EUR is weak, easily trading through 1.1300, and entering today’s NA session, down 1.1% since yesterday’s close, down 3.2% over the last two days, down 7% year‐to‐date and down 19% since its May 1.3993 high. The shift lower is supported by both fundamentals and flows and is expected to continue throughout 2015. The 19% drop since May is notable but well within the range of historical depreciations.”
“The first level of support lies at the psychologically important 1.1000, followed by the September 2003 low of 1.0765 and then the March 2003 low of 1.0504. Parity is now just 11% to the downside and remains fairly aggressive, but increasingly realistic.”
“For medium term traders, we are biased to be short EUR looking for a test down to 1.0765.”
“Today, EUR was content to ignore the vaguely better than expected PMI releases, with the manufacturing PMI rising to 51, and services up to 52.3.”
“For EUR, the near‐term risks remain politics, with the most obvious risk this weekend’s Greek election; followed by weekend comments from Davos and next week’s flash CPI release, expected to fall –0.5%y/y on headline.”
Key Quotes
“EUR is weak, easily trading through 1.1300, and entering today’s NA session, down 1.1% since yesterday’s close, down 3.2% over the last two days, down 7% year‐to‐date and down 19% since its May 1.3993 high. The shift lower is supported by both fundamentals and flows and is expected to continue throughout 2015. The 19% drop since May is notable but well within the range of historical depreciations.”
“The first level of support lies at the psychologically important 1.1000, followed by the September 2003 low of 1.0765 and then the March 2003 low of 1.0504. Parity is now just 11% to the downside and remains fairly aggressive, but increasingly realistic.”
“For medium term traders, we are biased to be short EUR looking for a test down to 1.0765.”
“Today, EUR was content to ignore the vaguely better than expected PMI releases, with the manufacturing PMI rising to 51, and services up to 52.3.”
“For EUR, the near‐term risks remain politics, with the most obvious risk this weekend’s Greek election; followed by weekend comments from Davos and next week’s flash CPI release, expected to fall –0.5%y/y on headline.”