As of late June, the euro/dollar has staged a modest rally from the $1.32 area toward $1.3475. Near term, analysts say more upside potential is likely for the euro/dollar.
“There is a better chance of heading toward $1.3670 than $1.32 anytime soon,” says Tim Mazanec, senior FX strategist at Investor’s Bank & Trust. “The ECB continues to be hawkish and will hike likely twice more this year, while the FOMC will be unchanged. Interest rate movers have the advantage.
” Brian Dolan, chief currency strategist at Forex.com, was “euro positive” over the near term as well. He pointed to the $1.3550 level as the next hurdle for the market. Gains through that level would open the door to the $1.3680 area, with further potential toward $1.3750 and $1.3830, he says.
On the downside, Dolan said the $1.3250 floor is key to watch and a break of that support would open the door to $1.3130.
“Over the short-term, play it from the long side,” Dolan says. “Use any shakeouts that might occur from a carry-trade shakeout as buying opportunity.”
Jamie Coleman, managing analyst at IFR Forex Watch, highlighted $1.3550 as a key resistance point. (The pair was as high as 1.3539 on June 29.)
“If that gets through, expect a full retracement back to $1.3680,” he says.
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