EUR downside remains well supported. German data adds to constructive tone.
EURUSD came under some initial pressure after ECB president Draghi re-iterated his comments from last week’s pressconference saying that policymakers were watching the incoming data and were ready to act again if necessary. The brief dip below 1.3050 once again found support and we continue to perceive downside risks to the EUR as limited due to on-going significant support from European market sentiment. Both European financial equities and the core-periphery spreads have been moving in a favourable direction and indicate that EURUSD can potentially strengthen to the 1.34-1.35 area. Germany’s March factory orders this morning rose by an expectedly robust 2.2% mm (vs consensus forecasts for a 0.5% mm decline). This data should add to the bullish tone today especially following the constructive price action in the wake of Friday’s nonfarm payrolls in the US. We established a long EURUSD trade recommendation at 1.30, targeting 1.34, with a stop at 1.2840.
Click here to read the full report: FX Daily
BNP Paribas