EUR/USD: Near-term momentum returning to the downside – TDS
Risk appetite made another attempt at stabilization overnight, but this reversed as European contagion concerns became more entrenched. The US will release new home sales at 15:00 GMT. EUR/USD trades at 1.087, economists at TD Securities report.
Key quotes
“Interestingly, vol markets have started to wake up with vols at several tenors back to multi-month highs. This has put EUR/USD's small rebound over the last several days in jeopardy.”
“The failure to achieve a 1.09 handle suggests near-term momentum is returning to the downside. This returns us to a sell-on-rallies posture as we think a re-test of this month's lows at 1.0778 could be in view.”
“We expect new home sales to rebound to 730k in Jan, following the three consecutive declines that brought the level below the 700k mark. The level stood at 694k for Dec.”