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Analysts at OCBC Bank prefer to position for weakness in the EUR/USD on potential further disappointment on the fiscal rescue front.

Key quotes

“The inability of politicians to cobble together a coherent fiscal rescue package will inhibit any EUR/USD resurgence, especially in a time where speed and decision are key.”

“Note that the bounce yesterday failed to touch 1.0900. Risk-reward probably favours downside for now, even though the USD itself is also soggy.” 

“Immediate downside target at 1.0833, while 1.0920 caps.”

“We initiate a tactical short EUR/USD (spot 1.0856), targeting 1.0435, with a stop loss at 1.1065.”