Euro Dollar Exchange Rate Outlook: EUR/USD 'Neutral-Bullish' Approach Urged

By Gary Howes

FuturesTechs have issued their latest call on the euro dollar exchange rate with a Neutral-Bullish bias being expressed.

The spot euro dollar exchange rate is seen 0.17 pct lower at 1.3778 in mid-morning trade in London.

Concerning the outlook for the euro dollar, analysts at FuturesTechs hint at a mildly bullish tone being maintained in the near-term.

A note issued to clients today is as follows:

• Short Term Trend: Neutral-Bullish
• Medium Trend: Bullish
• Candlestick Chart says: Made a new high for the year on Friday but has opened quite a slug weaker this morning on a “Flight to quality” bid in the USD. However we have held Marabuzo support at 1.3757 TO THE TICK and from a chart point of view this is good news for the bulls.
• Profile Charts say: 1.3733 is the bottom of the Vacuum created on Friday
• Summary: You could get long with a stop below 1.3757 or 1.3733 but the next few days could be about fundamentals/geopolitics/war headlines rather than charts.

Tensions in Ukraine to dominate FX trading

As mentioned, the tensions in Ukraine will continue to dominate the headlines on the financial newswires.

European assets (equities) in particular might be quite sensitive to negative headlines from Ukraine. ‘Normally’ one should expect some negative fall-out on the euro too.

"However, a decline in core bond yields currently is at least as negative for the dollar as it is for the euro. We look out how long current euro resilience continues. For now, we don’t preposition for a big leap south of EUR/USD," says Piet Lammens at KBC Markets.

Concerning the euro dollar exchange rate's outlook, Lammens says: "We need a technical signal first that the currency pair enters a sell-on upticks pattern. A sustained drop below 1.3643 could be such a signal. We’re not that far yet. For USD/JPY, we expected the current moderate downward pressure to persist. 100.76 is a first important support."