FXStreet (Delhi) – Piotr Matys, EM FX Strategist at Rabobank, notes that the squeeze in EUR/USD from last week’s low at 1.0803 extended to an intraday high of 1.0984 on Tuesday.
Key Quotes
“It seems that market participants have opted to trim their short positions ahead of the Christmas break in most European countries. That said, we expect EUR/USD to start leaning towards the year-to-date low at 1.0458 at the beginning of 2016.”
“The scale of a pullback in EUR/USD will not only depend on the monetary policy divergence between the US and the Eurozone, but on demand for risk. The more positive market sentiment, the softer the euro, which is used as a funding currency. In the meantime, European stocks are lacking clear direction as market participants are reluctant to get involved ahead of the Christmas break.”
(Market News Provided by FXstreet)