Forex: EUR/USD back to the area around 1.3375/80

After a failed attempt to follow through the key resistance at 1.3400, the single currency lost impetus and is trading back to the 1.3370/75 region on Monday, following the increasing risk aversion.

Analyst M.Mohi-ddin at UBS highlights the difficult political scenario lying ahead of the euro, arguing “Combined with Spanish Prime Minister Rajoy facing corruption allegations over political party funds and former Italian Prime Minister Berlusconi surging in the polls before elections on February 24-25, the euro is likely to trade in a 1.30-1.37 range over the next few months rather than trending higher towards 1.40 against the US dollar”.

As of writing, the cross is up 0.10% at 1.3382 facing the next hurdle at 1.3426 (MA21d) ahead of 1.3430 (high Feb.8) and finally 1.3462 (low Feb.5).
On the downside, a dip beyond 1.3326 (hourly low Feb.11) would aim for 1.3265 (low Jan.23) en route to 1.3216 (Lower Bollinger).

Feb 11, 2013

Forex Flash: Reports of a joint statement on currency devaluation – TD Securities

TD Securities analysts see space for markets to talk politics and currencies. “Weekend press suggests US and European officials are considering issuing a joint statement on currency devaluations with the large focus on the yen in recent months (and Venezuela announcing another devaluation (32%) of the bolivar over the weekend)”, wrote analyst Richard Kelly, pointing also to this week's BoJ monetary policy decision, likely to be a non-event as markets wait for announcement of the new Governor later this month to take over in April. “ADB Head Kuroda, one potential candidate, was on the wires talking up a 2% inflation target and saying the BoJ should not be responsible for buying FX bonds, an option that had previously been on the table to weaken the yen”, Kelly added.

Forex Flash: EUR/JPY correcting lower, capped at 127.71/93 - Commerzbank

The EUR/JPY is downside corrective and Commerzbank analysts' attention attention remains on the 6 week uptrend at 121.46 and the 3 month uptrend at 119.15: “We look for these to hold the downside and provoke recovery. Near term rallies should ideally remain capped by the 127.71 6th February high and 127.93 the April 2010 high for this downside corrective phase to be maintained”, wrote analyst Karen Jones, pointing to resistance at 127.93 (April 2010 high) that guards 128.80/129.00 (78.6% retracement of the move down from 2009 and the 200 month moving average).