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17 Apr 2013
Forex Flash: EUR returned with a vengeance against USD - OCBC Bank
Emmanuel Ng of OCBC Bank notes that EUR returned with a vengeance against the USD and shrugged off an unimpressive German ZEW.
He adds that the pair may remain tilted towards the upside if risk appetite levels continue to recover in the near term and any ability to continue to hold above the 55-day MA (1.3121) may permit a test towards the 1.3240 neighborhood before 1.3315. On a structural note, he recommends that investors note that the IMF indicated that the EUR was moderately overvalued. Moving to GBP/USD he adds that BOE MPC minutes are due today with investors keen to glean any indications of any intent to engage in further QE. He writes, “Note March CPI numbers were softer than expected). Although the pound may be beset by monetary policy expectations and a still weak macro backdrop, a further recovery in risk appetite levels may see support for the pair emerging on dips towards the 55-day (1.528), with the next support level expected at around 1.5200.”
He adds that the pair may remain tilted towards the upside if risk appetite levels continue to recover in the near term and any ability to continue to hold above the 55-day MA (1.3121) may permit a test towards the 1.3240 neighborhood before 1.3315. On a structural note, he recommends that investors note that the IMF indicated that the EUR was moderately overvalued. Moving to GBP/USD he adds that BOE MPC minutes are due today with investors keen to glean any indications of any intent to engage in further QE. He writes, “Note March CPI numbers were softer than expected). Although the pound may be beset by monetary policy expectations and a still weak macro backdrop, a further recovery in risk appetite levels may see support for the pair emerging on dips towards the 55-day (1.528), with the next support level expected at around 1.5200.”