EUR/USD: Technicals and Sovereigns point higher
The danger with extended periods of range trading is that we go looking for reasons to break out and I guess I’m guilty of doing exactly that. Nevertheless, the 50day/200day technical cross-over mentioned below could be important and the consistent buying by Asian central banks (diversifying out of interventionist USD purchases?) will also have an impact. This allied with the potential short-term basing patterns in EUR/GBP and EUR/AUD leads me to think that we will at least see a test of range highs near 1.3180 in coming sessions. On the other hand, I see no reason for any ‘panic buying’ and any moves are likely to be orderly and with plenty of pull-back buying opportunities.