Forex Flash: What lies ahead of EUR/USD? – UBS, Commerzbank and Westpac

The single currency continues to range bound between 1.3350 and 1.3325 on Monday, after the G20 meeting finished without major announcements or fireworks. Almost empty docket ahead in the day for the euro zone would leave the euro to the mercy of the risk trends.

The Swiss bank UBS remains neutral on the cross, with Strategists G.Yu and G.Berry adding, “There is strong support at 1.3270. Only a closing break below this would trigger deeper sell-off to 1.3187. Resistance is at 1.3393 ahead of 1.3520”.

In addition, Karen Jones, Head of FICC Technical Analysis at Commerzbank, suggests, “The 1.3273/56 band is key support near term… This is likely to hold the initial test – however the risks have increased that we will see an eventual break down through here towards the more important 1.3202 7 month uptrend and a close below here is required to negate the up move completely”.

Against the backdrop of the last release of the GDP figures and arguments surrounding the FX policies, Sean Callow, Strategist at Westpac, commented, “In the week ahead EUR will also be hampered by Italy’s 24-25 Feb election but the shrinking ECB balance sheet should limit downside multi-week, to 1.32”.