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4 May 2015
EUR/USD upside target at 1.1350 – Growth Aces
FXStreet (Barcelona) - The Growth Aces Research Team believes that the EUR/USD correction lower was as a result of a hawkish Fed and ECB’s Constancio’s comments in support of the central bank’s QE program, and further suggests remaining long on the pair, targeting 1.1350.
Key Quotes
“The U.S. economy's weak winter performance, including near-zero growth in HFP, has pushed back market expectations for a policy tightening to September or December, when key Fed meetings are also scheduled.”
“However, the hawkish-leaning chief of the Cleveland Fed Loretta Mester (voting this year) said the Fed could well raise interest rates as soon as June. She said: “There are a whole bunch of data releases that will come out between now and June. But to me the employment reports will be indicative of a lot”.”
“John Williams, president of the San Francisco Fed (voting this year), is also the opinion that a hike in June is still “on the table”. He said the Fed would get two months of data, including jobs reports for April and May as well as retail sales data, inflation data and other key metrics.”
“European Central Bank Vice President Vitor Constancio expressed his confidence that Athens and its creditors will agree a deal to avoid Greece leaving the Eurozone.”
“Constancio said that the ECB had no intention of prematurely ending its quantitative easing programme aimed at pumping around EUR 1 trillion into the financial system by September 2016.”
“The combination of relatively hawkish comments from the Fed and ECB’s Constancio providing a rationale for not wanting to halt QE supported the USD against the EUR.”
“We have used today’s correction to buy EUR/USD at 1.1150, in line with our strategy. The next target is 1.1350.”
“Resistance: 1.1282 (100-dma), 1.1290 (high May 1), 1.1380 (high Feb 26)”
“Support: 1.1125 (100-hma), 1.1116 (hourly low Apr 30), 1.1072 (low Apr 30)”
Key Quotes
“The U.S. economy's weak winter performance, including near-zero growth in HFP, has pushed back market expectations for a policy tightening to September or December, when key Fed meetings are also scheduled.”
“However, the hawkish-leaning chief of the Cleveland Fed Loretta Mester (voting this year) said the Fed could well raise interest rates as soon as June. She said: “There are a whole bunch of data releases that will come out between now and June. But to me the employment reports will be indicative of a lot”.”
“John Williams, president of the San Francisco Fed (voting this year), is also the opinion that a hike in June is still “on the table”. He said the Fed would get two months of data, including jobs reports for April and May as well as retail sales data, inflation data and other key metrics.”
“European Central Bank Vice President Vitor Constancio expressed his confidence that Athens and its creditors will agree a deal to avoid Greece leaving the Eurozone.”
“Constancio said that the ECB had no intention of prematurely ending its quantitative easing programme aimed at pumping around EUR 1 trillion into the financial system by September 2016.”
“The combination of relatively hawkish comments from the Fed and ECB’s Constancio providing a rationale for not wanting to halt QE supported the USD against the EUR.”
“We have used today’s correction to buy EUR/USD at 1.1150, in line with our strategy. The next target is 1.1350.”
“Resistance: 1.1282 (100-dma), 1.1290 (high May 1), 1.1380 (high Feb 26)”
“Support: 1.1125 (100-hma), 1.1116 (hourly low Apr 30), 1.1072 (low Apr 30)”