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26 Mar 2013
Forex: EUR/USD falls to 4-month low at 1.2830; Anyone want to have an euro?
FXstreet.com (San Francisco) - Who would want to have a penny in an European bank account following the Cypriot developments? After the 30% levy measure and the Jeroen Dijsselbloem words on Cypriot template for another countries, investors has been concerned about their confidence in European banks. Then, market sell euros and the single currency was the loser of the day.
The EUR/USD traded lower on Monday, falling more than 200 pips from 1.3040 to break down 1.3000 and 1.2900 levels as the confidence on the single currency was hurt by the Cypriot resolution hangover. The pair reached 1.2828 as lowest level since November 22nd and currently it remains stuck around 1.2850.
In addition, Jeroen Dijsselbloem, head of the Eurogroup of eurozone finance ministers, affirmed that the Cypriot plan would be used as template for another countries in the eurozone. As valeria Bednarik, FXstreet.com analyst comments, "the pair came under pressure mid European morning, hovering around 1.2950 until Dutch Finance Minister Dijsselbloem stated that more bail-ins could happen in Europe. He changed his wording an hour later, but it was too late: market players are not willing to trust the Euro, and possibilities of bank runs had increased now exponentially. "
The EUR/USD is currently down 0.83% on the day and it is trading inside a slightly bearish trend according to the FXstreet.com Forex Studies. Indicators such as MACD, CCI and Momentum are bearish while the Stochastic is bullish in the 1-hour chart. "Short term oversold according to the hourly chart, the pair consolidates near mentioned daily high and capped by former support in the 1.2880 area that now should attract selling interest if reached," points Bednarik.
According to Rabobank, investors must pay attention for further declines in the EUR/USD. “There are also questions about the viability of the economy now that the financial sector has been crippled and whether it will need further support in the future”, comments Jane Foley, Strategist at Rabobank. “We continue to favour selling EUR/USD on rallies and look to a move to EUR/USD1.28 on a 3 mth view”, recommends Foley.
The EUR/USD traded lower on Monday, falling more than 200 pips from 1.3040 to break down 1.3000 and 1.2900 levels as the confidence on the single currency was hurt by the Cypriot resolution hangover. The pair reached 1.2828 as lowest level since November 22nd and currently it remains stuck around 1.2850.
In addition, Jeroen Dijsselbloem, head of the Eurogroup of eurozone finance ministers, affirmed that the Cypriot plan would be used as template for another countries in the eurozone. As valeria Bednarik, FXstreet.com analyst comments, "the pair came under pressure mid European morning, hovering around 1.2950 until Dutch Finance Minister Dijsselbloem stated that more bail-ins could happen in Europe. He changed his wording an hour later, but it was too late: market players are not willing to trust the Euro, and possibilities of bank runs had increased now exponentially. "
The EUR/USD is currently down 0.83% on the day and it is trading inside a slightly bearish trend according to the FXstreet.com Forex Studies. Indicators such as MACD, CCI and Momentum are bearish while the Stochastic is bullish in the 1-hour chart. "Short term oversold according to the hourly chart, the pair consolidates near mentioned daily high and capped by former support in the 1.2880 area that now should attract selling interest if reached," points Bednarik.
According to Rabobank, investors must pay attention for further declines in the EUR/USD. “There are also questions about the viability of the economy now that the financial sector has been crippled and whether it will need further support in the future”, comments Jane Foley, Strategist at Rabobank. “We continue to favour selling EUR/USD on rallies and look to a move to EUR/USD1.28 on a 3 mth view”, recommends Foley.