Forex. Brokers, News, Trades

(Dow Jones via eFXnews) Morgan Stanley shorts EUR/USD at 1.3300 and will continue selling on rebounds. “Though a finalisation of the Greek bailout and PSI deals has spurred near-term optimism, we warn that implementation risks still loom high.

Furthermore, harsh fiscal austerity risks putting a number of European peripheral countries into a deep recession, pressuring debt/GDP ratios higher.”

The euro also faces downside risks to the upcoming 3-year LTRO next week, MS says. From 1.33, Morgan Stanley is targeting EUR/USD at 1.2390 with a 1.3460 stop.

Meanwhile the bank issues a cautionary note on commodity currencies . “It appears as if good news was already priced into high-beta currencies, consequently commodity currencies barely reacted,” says the bank.

Morgan Stanley Shorts EUR/USD At 1.3300 (full story)

Open 1.3110 High 1.3120 Low 1.2929 Close 1.3105

On Wednesday, 25th January, 2012 Euro/Dollar increased significantly with 190 pips. The Euro appreciated from 1.2929 to 1.3120, matching the positive Interbank sentiment projection at almost +10%.

A break above the resistance and yesterday’s top at 1.3120 may trigger further strengthening of the Euro. Going bellow yesterday’s low at 1.2929, would confirm continuation of the bearish trend, towards 1.2818.

Today’s focus is on France and Italy Consumer confidence, at 7:45 and 9 GMT respectively.

Technical resistance: 1.3120 1.3237 1.3360
Technical support: 1.2929 1.2818 1.2700

Trading range: 1.2995 – 1.3170

Trend: Upward

Looking ahead, the focus turns to January’s preliminary set of Eurozone PMI figures, with consensus forecasts calling for narrow improvements.

The region-wide composite PMI reading is expected to rise to 48.5 in January from 48.3 in the previous month, meaning both the manufacturing and service sectors shrank at a slower pace.

While this hardly sounds like something that ought to make investors overly cheerful, the results offer a bit of additional fodder for the corrective Euro rebound to continue as over-stretched net-short positioning is unwound ahead of next week’s EU leaders’ summit (which likely explains the sanguine response to continued impasse on Greek PSI negotiations ).

Speculative bets on Euro weakness hit another record high last week according to data from the CFTC.

Source.