Deutsche Bank - EURUSD: We suggest buying any Draghi-led dip
Deutsche Bank - "In the coming week, with the RBA, ECB and BOE meeting, policy nuance will no doubt be particularly important. On the ECB, it is very unlikely that recent market inspired tightening is considered desirable. Draghi may well try to temper the back up in term EURIBOR, although the short-term rate market will need to get through the LTRO2 prepayments on February 22nd before stabilizing. Between attempts to undermine the recent upward drift in rates, and even some subtle hints on excessive FX volatility, the ECB is likely to (only temporarily) dampen enthusiasm for the EUR. The problem the ECB faces is they are perceived to be the only Central Bank fully keeping to the spirit of the G7 non- interventionist script. Meanwhile, the relative ECB/Fed balance sheets still point to further EUR appreciation: 1.40 now looms, and we suggest buying any Draghi-led dip and only paring back strategic EUR/USD longs nearer 1.39. The encroaching question is whether longer-term valuation, starts to encourage long-term EUR bears, of which one measure will be some deviation in long-term risk-reversals favoring EUR/USD’s downside even as spot creeps higher. So far we have seen no sign of this."
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Comment by Luke Sierpniak on February 4, 2013 at 5:04pm -
Well when Draghi spoke in December we dropped from 3080ish to 2970 in one day and touched 2900 the next day, so it's not always a buy, good luck
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Comment by fxretracer on February 4, 2013 at 7:31pm -
Luke, if you bought then you`re in good shape now, so you dont make much sense. Anyone who saw the very few posts I have made in recent months about the EURUSD saw me as bullish. In recent weeks the monthly EURUSD chart is very bullish as well. At last. 1.40 is an area I have been seeing as the strongest resistance as well.
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Comment by Luke Sierpniak on February 5, 2013 at 8:23am
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1.40 is of course not out of the question, but we are gonna correct big before we go there, anyway good luck guys and lets make pips
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Comment by Nsaale Kalule on February 5, 2013 at 10:13am -
True, Eur is going back to 1.3600 levels today.
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Comment by Max on February 5, 2013 at 12:40pm -
I think it will 1.40 closer or faster than many think, then there will be bears to take it very low again, back 1.3 and...
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