EUR/USD next target at 1.0457 – GrowthAces

FXStreet (Barcelona) - The GrowthAces Research Team maintains a short position on EUR/USD targeting 1.0457 levels, noting that the recent weakness is a result of carry trades, and further comments on the upcoming ECB meeting.

Key Quotes

“The EUR/USD fell to the lowest levels since March 18. A depreciation of the EUR is a result of carry trades. German bond yields out to 8 years are now in negative territory, so the EUR is a funding currency.”

“We have closed our long position with a loss at 1.0600. Breaking below this level is a strong bearish signal that may point to further fall of the EUR/USD despite weakening macroeconomic figures from the USA and improving economic performance of the Eurozone.”

“Our trading strategy will be to sell the EUR/USD at 1.0675. The next target of the EUR/USD bears will be 2015 low of 1.0457.”

“The European Central Bank’s meeting is scheduled for next week. We should expect little news from ECB President Draghi’s press conference. The weaker EUR is already pushing up import prices of core consumer goods, so the risk of an outright deflation in the Eurozone is very small now.”

“Let us remind that the ECB’s Governing Council member Yves Mersch said the bank would be free to adjust its quantitative easing if it advanced faster than expected towards its goal of lifting inflation. Such a rhetoric is rather unlikely already at April ECB meeting. However, this issue may be raised in the coming months.”

“Resistance: 1.0685 (hourly high Apr 10), 1.0788 (hourly high Apr 9), 1.0797 (10-dma)”

“Support: 1.0580 (low Mar 18), 1.0551 (low Mar 17), 1.0457 (low Mar 16)”