5 May 2014
ECB; chances of action rising - Scotiabank
FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank notes that the chances of ECB action have risen.
Key Quotes
" Eurozone data suggests a weakening in investor confidence and as expected PPI, falling –0.2%; while the European Commission updated spring forecast downgraded both the GDP and inflation outlook.”
"GDP in 2014 is expected at just 1.2% and 1.7% in 2015; while inflationary pressure is expected at just 0.8% in 2014 and 1.2% in 2015 (lower than current market consensus of 0.9% and 1.3%, respectively). These forecasts are EUR negative, however the currency failed to react in quiet trading and as we move into the event risk of Thursday’s ECB meeting."
"The chances of ECB action have risen; however we think the risks are slightly skewed to no policy chance this week. We hold a Q214 EUR forecast of 1.37 and a year-end target of 1.30."
"EUR/USD short-term technicals: mixed—suddenly technicals are sifting from bullish to mixed, a warning sign that there is a loss of momentum. Support lies at the 50-day MA at 1.3815; while resistance is at the recent April high of 1.3906."
Key Quotes
" Eurozone data suggests a weakening in investor confidence and as expected PPI, falling –0.2%; while the European Commission updated spring forecast downgraded both the GDP and inflation outlook.”
"GDP in 2014 is expected at just 1.2% and 1.7% in 2015; while inflationary pressure is expected at just 0.8% in 2014 and 1.2% in 2015 (lower than current market consensus of 0.9% and 1.3%, respectively). These forecasts are EUR negative, however the currency failed to react in quiet trading and as we move into the event risk of Thursday’s ECB meeting."
"The chances of ECB action have risen; however we think the risks are slightly skewed to no policy chance this week. We hold a Q214 EUR forecast of 1.37 and a year-end target of 1.30."
"EUR/USD short-term technicals: mixed—suddenly technicals are sifting from bullish to mixed, a warning sign that there is a loss of momentum. Support lies at the 50-day MA at 1.3815; while resistance is at the recent April high of 1.3906."