Air thin for EUR/USD at 1.36

Whether wishful thinking or tempting fate, the president of the European Council, Herman Van Rompuy, said today that ‘the existential problem of the euro is behind us’.

It would also seem that political heads are taking issues regarding Greece’s 2014 fiscal gap one year at a time, pushing any decisions on how to deal with the issues until next year. The Ecofin conference in Luxembourg is likely to touch on this, as well as continued questions on the potential banking union.

For now the euro seems to find the $1.36 level against the dollar a little overdone, and the pair has pushed below previous resistance of $1.3570 in early trade.

The release of Germany’s ZEW economic sentiment survey for October may be what is needed to push GBP/USD higher. Expectations are for a small decline from last month’s 49.6, to 49.2. Given how important the powerhouse of the eurozone is for growth expansion, we can expect to see a little volatility should this number fail to impress.

Later this afternoon we will get to see the New York manufacturing index. An improvement to 7.5 from last month’s 6.3 is expected, yet – in light of the current impasse in Washington – markets may have to prepare themselves for a miss.

Key support for the pair lies at $1.35, while above that the bias is for a stronger euro. Any drop below the $1.3450 level opens a path for a return to $1.3320.

Spot FX EUR/USD chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by analysts

Find out more about