Over at UBS they continue to have a three month target of 1.2500 in the EURUSD. Their technical view is as follows “The pair has moved below 1.2954 to signal extension of weakness towards 1.2855. Resistance is at 1.3066.”
JP Morgan is putting their focus on Greece. “ In the European session, Greece will remain the main focus. Leftist leader Tsipras gave up on his attempt to form a new government on Wednesday and now the baton will pass to PASOK leader Evangelos Venizeros. If he also fails, elections will be held in coming weeks (the most likely timing is June 17) and this scenario is highly likely to materialize. Should New Democracy and Pasok gather a slightly higher share of votes than they did last Sunday at the next election, they could achieve a parliamentary majority and put this EMU exit speculation to rest. Under such a scenario EUR/USD would return to a range above 1.30. Should the left prevail, all bets are off.” Although they did write later in their morning research notes that “A senior German coalition member said that a disorderly Greek default would be less worrying no than it was a few month ago.”
Commerzbank’s team: “From a technical point of view the next support in EUR-USD is located at 1.2809 before focus shifts to the January low at 1.2624. But experience teaches us that the FX market is not a one way street: if the downtrend in EUR-USD grinds to a halt today we might see a temporary recovery.” On that note, they pointed out an important element that is supporting the price of the EURUSD and could keep it around the 1.3000 level “As a result the euro remains under pressure. The only reason why it is not depreciating further is that German bonds are benefitting from the risk aversion. 10 year Bunds are only yielding just above 1.5%.”
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