FX Commentary – EUR seen at 1.5700

Euro seen heading to $1.5700

The inability of the euro on Wednesday to break above 1.5948, combined with a major slide in the oil price pushed the euro sharply lower against the dollar to touch a low of 1.5802 in NY trade.
The rebound since then has failed to penetrate through 1.5880, indicating that a new round of euro weakness is in store. First target of the current move unfolding early Thursday is to touch minimum objective of 1.5790, below which the way will be open for a sharp decline to the next chart support level of 1.5710.
Over there, things will become difficult to predict since while the trend indicators will point to further losses for the euro, but the heavy congestion support area of 1.5610-1.5680 will kick in, providing support.
We shall fine tune our commentary when we reach there. Our stops on new fresh short euro positions established this morning is at 1.5895 break for tight strategy or maximum 1.5955.
Dollar is also staging a rebound against the Swiss franc and having crossed the 1.0155, is targeting a move to 1.0260, and thereafter 1.0300. This is further helped by cross activity on EUR/CHF, which after the bounce from yesterday’s low, can recover back to 1.6220 zone.
Sterling needs to break 1.9960 but more importantly 1.9890 to kick in a major dive to 1.9700 area. On the crosses, we see a modest recovery of sterling against the CHF to 2.0300 area and against JPY to 211 area.

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