Today's Comment
Further bad news needed to maintain momentum
- EUR/NOK (from SELL to NEUTRAL): We are not quite comfortable about the development of the economic growth indicators. If the oil price falls below 95, NOK will come under pressure.
- EUR/SEK (from SELL to NEUTRAL): If the fear relating to currencies and commodities spreads to equities, it will be bad news for SEK. The circumstances are uncertain .
- EUR/USD (SELL): 140.50 was breached yesterday. The road is clear to 137, which is our new short-term target. However, technical information indicates a target area at 132.
- EUR/CHF (SELL): We reiterate our SELL recommendation. Previously we indicated 125 as our last resort for a NEUTRAL recommendation . We now remove the 'last resort'.
Yesterday was to some extent affected by the turmoil seen on Friday, yet nonetheless the majority of the major currencies (majors) were more or less unchanged at the close in the US. The 'Greek disease' lost some momentum during yesterday's trading session, and right now it further fuel will have to be added to the fire to prevent a correction of the most recent 'risk-off' movement where investors bought USD, JPY and CHF.
EUR/NOK and EUR/SEK (from SELL to NEUTRAL): Yesterday we changed our recommendation from SELL to NEUTRAL. We are not quite comfortable about the situation in Europe. The Scandinavian currencies are to some extent considered 'safe-haven' currencies, but if the crisis escalates or we see further indications of a slowdown in growth (including falling equity and commodity prices), also NOK and SEK will be affected. We will look out for a new opportunity to recommend Sell.
EUR/USD (SELL): Yesterday we revised up our short-term target from 139 to 137. If 137 is breached, we may see a movement down towards 132. In the very short term, we need to see further bad news for EUR to maintain the downward movement for the cross rate. In this respect, it may be wise to keep an eye on today's Ifo figures to be released in Germany.
EUR/CHF (SELL): The cross rate increases slightly again, but nonetheless we remove the 'last resort' at 125 mentioned yesterday for your recommendation. Hence we reiterate SELL and will not reconsider our recommendation until we reach 126 again.
Today's most important events: (* = consensus)
- 10:00 Ifo (DEM)
- 10:00 GDP - Q1 (NOK)
Chart of the day: EUR/NOK
Jyske Markets - FX Research
http://www.jyskebank.dk/finansnyt
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