FXStreet (Barcelona) – According to the KBC Bank Research Team, the rising Grexit risks remain short-term negative for the EUR/USD, but with USD losing interest rate support, any shorts on the pair should be subject to some caution.
Key Quotes
“Rising Grexit risk is intrinsically negative for the euro. At the same time we see the dollar losing interest rate support, too. So, the picture for EUR/USD trading might be more balanced than the headlines on Greece suggest. The short‐term trend is EUR/USD negative, but we don’t add to EUR/USD short exposure.”
“In a longer term perspective, EUR/USD still trades in the 1.0819/1.1467 consolidation range. We maintain a sell on upticks approach for return action lower in this range. We are well aware of the risks of a Grexit and given a higher probability of additional ECB easing, the 1.0819 may be tested in the days/weeks ahead. The 1.1534 February correction top remains our line in the sand to maintain a USD positive bias MT term and this resistance became now much stronger.”
“On the downside, the 1.0819 level (27 May low) is the first high profile reference. A break below that level would open the door for a retest of the 1.0521/1.0458 area. A sell‐on‐upticks approach around 1.1280 area is preferred. Uncertainty on Greece might continue to cause erratic swings.”
(Market News Provided by FXstreet)