16 Jun 2015
EUR/USD: More wait-and-see game as Greece stalemate persists – KBC
FXStreet (Barcelona) - The KBC Bank Research Team suggests adopting caution on EUR/USD trades as Greece related stalemate continues, and prefer selling the pair on upticks, but while considering risks.
Key Quotes
“Yesterday, we advocated that trading in EUR/USD and, to a lesser extent, in USD/JPY is paralysed by the Greek debt crisis. The upcoming FOMC meeting is an additional factor of uncertainty. The outcome of the Greek debt crisis is a binary risk and it is very difficult for investors and traders to preposition for the outcome of this crisis. A last second solution or an outright failure are both possible. In this context, being short euro is a big risk, too. The context is euro negative, but for now EUR/USD remains some kind of erratic in nature.”
“We continue to keep an eye at the intra‐EMU spreads. Yesterday, there was a further substantial widening, even in the semi‐core. However, for now it had no noticeable negative impact on the euro.”
“EUR/USD still trades in the consolidation range marked by 1.0819 and 1.1386/1.1467. A break above the upside band would be a warning signal for USD bulls. We maintain our cautious sell on up‐ticks approach for return action lower in this range as we don’t see a real change in the global picture, but we are well aware of the risks (stop loss).”
“In a longer term perspective, the 1.1534 February correction top remains our line in the sand to maintain a USD positive bias MT term. We assume that this level will hold, e.g. even in case of an agreement on Greece. However, stop‐loss protection is warranted to defend a break, for whatever reason.”
Key Quotes
“Yesterday, we advocated that trading in EUR/USD and, to a lesser extent, in USD/JPY is paralysed by the Greek debt crisis. The upcoming FOMC meeting is an additional factor of uncertainty. The outcome of the Greek debt crisis is a binary risk and it is very difficult for investors and traders to preposition for the outcome of this crisis. A last second solution or an outright failure are both possible. In this context, being short euro is a big risk, too. The context is euro negative, but for now EUR/USD remains some kind of erratic in nature.”
“We continue to keep an eye at the intra‐EMU spreads. Yesterday, there was a further substantial widening, even in the semi‐core. However, for now it had no noticeable negative impact on the euro.”
“EUR/USD still trades in the consolidation range marked by 1.0819 and 1.1386/1.1467. A break above the upside band would be a warning signal for USD bulls. We maintain our cautious sell on up‐ticks approach for return action lower in this range as we don’t see a real change in the global picture, but we are well aware of the risks (stop loss).”
“In a longer term perspective, the 1.1534 February correction top remains our line in the sand to maintain a USD positive bias MT term. We assume that this level will hold, e.g. even in case of an agreement on Greece. However, stop‐loss protection is warranted to defend a break, for whatever reason.”