EUR/USD was hit by the German elections, but still remains in the high range. The key mover remains the European Central Bank. What’s next for the euro?
Here is their view, courtesy of eFXnews:
Nordea FX Strategy Research notes that every time EUR/USD has traded at 1.20, we get a leak or a comment from the ECB in an attempt to cap the single currency upside.
In that regard, Nordea argues that such a pattern could point that ECB officials are likely now considering 1.20 as the new 1.15 level where the central bank used to exprees its concern about the EUR appreciation.
“Why at every time EUR/USD has climbed above 1.20, we get a leak or a comment from the ECB?
We speculated in early August that 1.20 could be the new 1.15, and this communication pattern supports this view. It might be a pure coincidence, but even coincidences can impact the market.
If market participants expect other participants to act as if this perspective is true, it will become true insofar price-action is concerned, at least for a while,” Nordea argues.
For lots more FX trades from major banks, sign up to eFXplus
By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.