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5 Mar 2013
Forex Flash: EUR & GBP prospects stay bearish - OCBC Bank
Emmanuel Ng of OCBC Bank notes that looking ahead, he still holds a bearish bias on EUR/USD and GBP/USD.
Starting with EUR/USD he remains negative as the week started with a key Fibonnaci retracement level now acting as immediate resistance. He writes, “Apart form the psychological 1.3000 and 1.2900 floor, the next pivotal area is expected towards the 200-day MA (1.2846). Meanwhile, note that net CFTC speculative EUR positioning flipped to a net short balance in the latest week.”
Looking to Cable, he notes that the pair was pummeled on Friday following the surprise contraction of the manufacturing PMI and the growing malaise from recent data points continues to breed market expectations for further QE. He writes, “In the latest week, net CFTC speculative GBP shorts were further accumulated and we expect GBP/USD to seriously consider taking a trip below 1.5000 on a sustained basis this week if the BOE/macro new flow continues to remain dovish.”
Starting with EUR/USD he remains negative as the week started with a key Fibonnaci retracement level now acting as immediate resistance. He writes, “Apart form the psychological 1.3000 and 1.2900 floor, the next pivotal area is expected towards the 200-day MA (1.2846). Meanwhile, note that net CFTC speculative EUR positioning flipped to a net short balance in the latest week.”
Looking to Cable, he notes that the pair was pummeled on Friday following the surprise contraction of the manufacturing PMI and the growing malaise from recent data points continues to breed market expectations for further QE. He writes, “In the latest week, net CFTC speculative GBP shorts were further accumulated and we expect GBP/USD to seriously consider taking a trip below 1.5000 on a sustained basis this week if the BOE/macro new flow continues to remain dovish.”