FX forecast for Mar. 1

- [EUR/USD:] Judging by the amount of sales of the European currency for US dollars, the euro may continue to depreciate, Financial Brains director PhD Sveatoslav Mihalache has told Info-Prim Neo. The amount of sales of EUR/USD has reached the level of 70,000 contacts, as compared with the maximum of 120,000 contracts last November, so at this point it’s early to term the euro as oversold. In other words, this means that the bears – the traders that expect a security to cheapen – have enough room to push the price of the European further down. The budget deficit woes in Greece and Spain, which have so far negatively influenced the developments of the European currency, are continuing to be under scrutiny. Currently the euro trades at $1.3610, as the support levels are situated at $1.3580/90; $1.3530 and, the year’s high, $1.3420/40. The latter is a rather strong level, which has survived at least three bear attacks so far. The resistance levels stand at $1.3680/90; $1.3710 and $1.3840, with the latter being very solid. As long as the euro trades below $1.3840, the trend will remain bearish. [USD/MDL:] Over the last week, the demand for dollars on the domestic market was rather low, in particular from individuals. Legal persons were slightly more active buyers. The trading corridor was between 12.78 and 12.87 lei. The National Bank intervened with sales of dollars to ‘cool down’ the market. All these indicate that this week the dollar has no chance to appreciate against the leu. Today foreign exchange facilities will buy dollars at 12.80 – 12.82 lei and sell at 12.85 – 12.87 lei. [EUR/MDL:] 17.40 – 17.43 lei (bid) and 17.45 – 17.50 lei (ask).