Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Refinitiv
May 14 - 02:55 PM

RBC: Any EUR/USD Rallies to Resistance (1.0848/1.0977) Are Buying Opportunities

By eFXdata  —  May 14 - 01:30 PM

Synopsis:

RBC maintains a stable outlook on EUR/USD, predicting strong buying interest at lower price levels. The bank anticipates that corporate and long-term investor hedging at the 1.06 level will provide substantial support, limiting downside potential for the euro.

Key Points:

  • Corporate Buying Demand: European corporates and long-term investors are likely to continue showing strong buying interest in EUR/USD whenever it reaches the 1.06 level, providing a floor to further declines.
  • Central Bank Actions: RBC forecasts the European Central Bank (ECB) to implement additional rate cuts in June, September, and December, mirroring expected Fed cuts, thereby influencing yield differentials but already priced into forward curves.
  • Comparative Currency Impact: The expected changes in the yield gap are seen to have a more pronounced impact on currencies like the CAD, which is expected to see a widening negative yield differential with the US.
  • Technical and Fundamental Outlook: RBC views any rallies towards the resistance levels of 1.0848 and 1.0977 as potential buying opportunities, with technical support positioned at 1.0681 and 1.0601.

Conclusion:

While RBC has slightly adjusted its H2 forecasts for EUR/USD downwards, the overall strategy suggests a bullish stance on any rallies to key resistance levels.

Source:
RBC Research/Market Commentary

Subscription

  • eFXplus
  • End-user license agreement (EULA)

About

  • About
  • Contact Us

Legal

  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2024 eFXdata · All Rights Reserved
!