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23 Feb 2015
Credit Agricole: EUR/USD assessing risk of a major position squaring correction? – eFXnews
FXStreet (Barcelona) - The eFXnews Team shares Credit Agricole’s view of remaining short EUR/USD irrespective of the Greek outcome.
Key Quotes
“EUR downside has been limited for most of the week, mainly due to falling expectations of the Greek government to seriously consider exiting the Eurozone. Although it can still not be excluded that a temporary solution will be found for Greece’s funding needs, uncertainty is unlikely to deteriorate considerably.”
“It must be noted too that the leftist government still desires to roll back austerity measures.”
“Regarding the EUR, we believe that rallies should still be sold. This is not only due to political developments but also due to the ECB’s aggressive policy stance. Muted inflation expectations will enable the ECB to keep an aggressive policy stance.”
“As long as growth prospects improve considerably, the risk for further slowing price developments remains intact, especially as commodity prices may weaken anew. As such ECB President Draghi is unlikely to sound less dovish when he testifies ahead of the European parliament next week.”
“All of the above is likely limiting the risk of a major position squaring driven correction higher, regardless of elevated EUR short positioning. Hence we stay short EUR/USD.”
This content has been provided under specific arrangement with eFXnews.
Key Quotes
“EUR downside has been limited for most of the week, mainly due to falling expectations of the Greek government to seriously consider exiting the Eurozone. Although it can still not be excluded that a temporary solution will be found for Greece’s funding needs, uncertainty is unlikely to deteriorate considerably.”
“It must be noted too that the leftist government still desires to roll back austerity measures.”
“Regarding the EUR, we believe that rallies should still be sold. This is not only due to political developments but also due to the ECB’s aggressive policy stance. Muted inflation expectations will enable the ECB to keep an aggressive policy stance.”
“As long as growth prospects improve considerably, the risk for further slowing price developments remains intact, especially as commodity prices may weaken anew. As such ECB President Draghi is unlikely to sound less dovish when he testifies ahead of the European parliament next week.”
“All of the above is likely limiting the risk of a major position squaring driven correction higher, regardless of elevated EUR short positioning. Hence we stay short EUR/USD.”
This content has been provided under specific arrangement with eFXnews.