EUR/USD now looks at 1.05/1.06 – Westpac

FXStreet (Edinburgh) – In light of the recent developments, Strategist Richard Franulovich now sees EUR/USD grinding lower to the 1.05/1.06 band.

Key Quotes

“Price action suggests we have seen a fatal breakdown in the recent uptrend, backed by a renewed shift in yield spreads against EUR, elevated peripheral sovereign risk, stronger US data (notably housing starts, core CPI and durable goods orders) and what appears to have been a concerted effort by ECB officials to talk down yields and EUR by raising the prospect of further easing measures”.

EUR may well see a small bounce if Greek default risk can be averted ahead of the first of four IMF June loan payments, EUR312mn due June 5, but suspect any gains on this front will prove very short-lived”.

Draghi is certain to repeat that the ECB’s more optimistic outlook is based on, “full implementation”, of QE lest there be any residual doubts. EUR1.05/1.06 the initial target for this down move”.

In light of the recent developments, Strategist Richard Franulovich now sees the pair grinding lower to the 1.05/1.06 band…

(Market News Provided by FXstreet)