Forex Flash: What lies ahead of the EUR/USD? – Commerzbank, UBS and BTMU

The single currency remains in the area around 1.3065/70 on Friday, retracing ground after a failed attempt to follow through the key resistance at 1.3100 on mixed data from the euro bloc.

“EUR/USD we are beginning to suspect that the upside corrective phase terminated at 1.3163, which suggests that attention should revert to 1.3000”, suggests Karen Jones, Head of FICC Technical Analysis at Commerzbank. The expert also adds that the bearish bias would prevail as long as the cross trades below the area of 1.3293/1.3353

G.Yu and G.Berry, Strategists at UBS, remain neutral on the cross, arguing, “The strong support is at 1.2998, a closing break below this would be a bearish development, exposing 1.2877. Resistance is at 1.3162 ahead of 1.3283.

Lee Hardman, Currency Analyst at BTMU, comments, “The euro continues to remain under downward pressure following the inconclusive Italian election results which has resulted in investors adjusting higher Italy’s sovereign credit risk premium. The more prolonged the economic uncertainty the greater the potential negative impact upon euro-zone growth, which is already expected to still contract modestly in 2013”.