The pound is losing some further ground in the European morning with cable now threatening to slip back under the 1.2200 handle. Price has fallen to a session low of 1.2195.
As mentioned earlier, topside resistance remains at the 50.0 retracement level @ 1.2267 and that remains the risk for sellers. Meanwhile, the risk for buyers is if price holds a break back below the 1.2200 handle.
If we do see such a move, it will open up a test towards the 100-hour MA @ 1.2155 as well as potentially the 200-hour MA @ 1.2124.
There isn’t much driving the move lower here but as highlighted in the earlier post as well, Merkel’s comments isn’t exactly a major game-changer to the Brexit equation – not when it isn’t back by concrete solutions to the Irish border still.
A forecast for euro against the USD to fall to 1.10 before the end of this year.
Well, yeah. Not like there is far to go.
The forecaster, to be fair, has been calling it lower from a lot higher than here. After 1.10:
Rabo then expect it to trade to 1.15 on a 12 month horizon
Say the moves in Germany could prove supportive:
perhaps the German government will bow to calls of a fiscal belt loosening has breathed a little support into the EUR
On the European Central Bank:
In September it is likely that the outlook for the Eurozone and the reactions of the ECB will be instrumental in determining the direction of EUR/USD
the market has reacted well to the assumption that Italy could avoid a snap election and another budgetary battle with the EU in the near term
Italian politics combined with Brexit risks remain potentially negative factors for the EUR
On the Fed:
our expectation that the pace of Fed rate cuts are likely to accelerate in 2020 suggest that there is still scope for EUR/USD to head a little higher medium-term and we maintain our forecast of 1.15 on a 12 month view
They’ve been neck and neck for awhile. Two years ago China passed Japan but they’ve now reversed. One line of thinking will be that this is trade war related but I wouldn’t be so quick to draw that conclusion.
The mid rate from the People’s Bank of China for USd/CNY is due just after 0115GMT.
Reuters estimate is for a rate at 7.0421. If you’ve been following aolong the past week or so you’ll know that these estimates have come in on the igh side for USD/CNY. yes, the PBOC is allowing the yuan to weaken, but not by as much as expected.
I do wonder if that will change soon given the … is collapse to strong a word? … weaker credit growth reported yesterday:
New yuan loans ¥1,060.0 bn vs ¥1,275.0 bn expected
Aggregate financing ¥1,010.0 bn vs ¥1,625.0 bn expected
China FX regulator chief says does not expect disorderly depreciation of the yuan