Forex Flash: EUR/USD focused on ECB - OCBC Bank

FXstreet.com (Barcelona) - Emmanuel Ng of OCBC Bank notes that much will rest on the ECB this week with regards to EUR/USD, although the consequences of any potential rate cut is not expected to be one dimensional.

Further, he feels that while a rate cut may undermine the common unit, the prospect of further monetary accommodation may in fact lift EUR eventually. The EUR/USD may continue to chop around within recent ranges pending the ECB and the FOMC this week, with the key psychological 1.3000 support and the 200-day MA (1.2959) still holding. He sees that the pair’s ability to overcome the 55-day MA (1.3045) may also be a mild positive in the near term.

Looking to GBP/USD, he notes that the pound may continue to find comfort from supportive comments by the BOE’s McCafferty overnight. He writes, “With the pair at the doorstep of 1.5500, the next immediate resistance is only expected towards 1.5575 before 1.5610. In the short term, we continue expect investors to adjust slightly their hitherto bearish leanings towards the pound and this may see potential for further capitulation higher.”