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16 May 2013
Forex Flash: EUR/USD downside primed to accelerate – Westpac
FXstreet.com (Barcelona) - Regionwide advance May PMI (Thursday) the key release for the week. Already released May ZEW survey for Germany and the Eurozone suggest another month of sub- 50 readings for much of the region. The May German IFO survey (likely soft) is due Friday. Bevy of ECB speakers on tap including Draghi (Thursday) - keep an eye out any comments around a credit/lending scheme.
According to Sean Callow, a Global FX Strategist at Westpac, “The EUR/USD is probing lower levels but it has not borne the brunt of USD strength. Expect it’s just a matter of time before EUR/USD downside accelerates. A dovish tilt to Bernanke’s testimony will offer a reprieve but expect downside to resume soon enough, perhaps as soon as the following day when regionwide May advance PMI’s are slated for release.”
In addition, the EUR/AUD worth a sell into long term resistance at 1.32 if seen while EUR/CHF is a high conviction short above 1.2500 especially given Spanish and Italian 2yr spreads to bunds have been quietly drifting out in recent sessions
According to Sean Callow, a Global FX Strategist at Westpac, “The EUR/USD is probing lower levels but it has not borne the brunt of USD strength. Expect it’s just a matter of time before EUR/USD downside accelerates. A dovish tilt to Bernanke’s testimony will offer a reprieve but expect downside to resume soon enough, perhaps as soon as the following day when regionwide May advance PMI’s are slated for release.”
In addition, the EUR/AUD worth a sell into long term resistance at 1.32 if seen while EUR/CHF is a high conviction short above 1.2500 especially given Spanish and Italian 2yr spreads to bunds have been quietly drifting out in recent sessions