Thursday, October 29, 2015

EUR/USD forecast: FOMC hangover – Commerzbank and Danske Bank

FXStreet (Edinburgh) - EUR/USD is navigating the low-1.0900s following yesterday’s surprising hawkish tone by the Fed, leaving the door wide open for a rate hike in December.

Karen Jones, Head of FICC Technical Analysis at Commerzbank, argued the pair “has closed below its 1.0968/65 7 month 2015 support line, this is bearish and is considered to be the completion of a consolidation pattern which has developed for most of this year. We would like to also see a weekly close below here and we then look for losses to 1.0808 and 1.0457, the March low”.

Furthermore, Chief Analyst at Danske Bank Arne Rasmussen noted “we have previously seen how the cross becomes vulnerable to the upside when momentum loses pace and investors take profit. We expect this vulnerability to remain a risk factor, especially as we think speculative EUR/USD positioning has returned to stretched short levels post the dovish ECB and hawkish Fed surprises over the past week”.
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