- Category: Exchange Rates
- Published: Thursday, 06 December 2012 11:37
Concerning the euro's outlook, we note UBS are bullish in the euro dollar: "Setback from significant resistance at 1.3140/72 suggests there is scope fore consolidation. The important support zone lies at 1.2973/49."
William Moore at RBS notes, "The resistance level as indicated adjacent has been broken this week and this leads me to continue to believe that the markets in general will continue to squeeze into year end.
"The stock market too looks positive in the short term and this seasonality issue of a positive session for stocks between thanksgivingand new year looks to be prevalent."
Pound dollar exchange rate forecasts
The pound to US dollar exchange rate is 0.11 pct higher at 1.6116.
Concerning the pair's technical forecasts, Moore sees "very little conviction in the retracements and Ichimoku cloud short term or even the run in to the end of the year; I would say that from the longer term perspective the ceiling at 1.6306 will not be broken and if the market were to trickle towards there over the next couple of weeks it’s a better entry level for short positions retaining the downside targets at 1.5600 and 1.5300."
UBS analyst Geoffrey Yu sees potential for more upside: "There is potential for more upside and watch for a test of resistance at 1.6175 ahead of 1.6217. Support lies at 1.6016."
Euro pound exchange rate forecasts
Again, Yu is bullish on the euro: "The risk is for extension of the recovery and next major resistance is at 0.8169. Support lies at 0.8076/54."
Moore also suggests we will see a grind higher in EUR/GBP:
"So the market continues to grind higher in the weekly charts but it is important to mention here that topside momentum is dwindling and it’s beginning to dwindle as we approach the short term ceiling at 0.8156/62.
"This is lining up for a great trade next week of fresh short positions with a slightly longer term time frame.
"The stop would be above the 0.8162 level on a weekly close basis and the target down at 0.7757. The message for today and tomorrow is hold off and evaluate tomorrow’s close."