The Outlook is Bright But Euro Dollar Gains to be Capped at 1.3420

Euro Outlook for Today: The Euro is trading a little softer on Wednesday with Syrian uncertainty and shaky sentiment driving forex flows into the ultra-safe currencies such as CHF and JPY.

Euro Rates Today

A look at the spot markets shows that the EUR/USD is trading 0.36 pct lower; 1 EUR converts into 1.3345 USD.

The Euro to Pound exchange rate is 0.13 pct higher; 1 EUR converts into 0.8628 GBP.

[This is an inter-bank rate. Retail rates attract a spread; a specialist currency firm will however undercut the bank retail rate and provide you with more forex. To find out more, please read here.]

Today's Outlook for the Euro

We hear from a number of forex market commentators who have the following forecasts on the Euro Dollar exchange rate to offer:

Emmanuel Ng at OCBC says gains are likely to be capped at 1.3420:

"ECB board member Amussen reiterated that interest rates should stay low levels for an extended period of time while the EUR-USD failed to garner any significant mileage from the better than expected German Ifo readings.

"The pair however managed to recover from intra-day lows to end a touch on the day above 1.3380. Ii remains to be seen if the EUR-USD can continue to weather any escalation of global jitters, but in the interim, the pair may continue to contemplate the 1.3400 ceiling with subsequent resistance expected towards 1.3420."

Craig Erlam at Alapri UK is forecasting further gains for EUR:

"A close above 1.34, which should prompt a move towards the previous highs around 1.3710, a move that looks likely at this stage following the break of a key descending trend line last week. Alternatively, a break below the neckline of the head and shoulders on the daily chart could prompt a move towards 1.31, based on the size of the formation, with support being found initially around 1.32."

Luc Luyet at MIG Bank says the outlook for the Euro is likely to be hampered by resistance levels:

"EUR/USD remains in a succession of higher lows with a significant support at 1.3190. Yesterday's early decline was met with buying interest, which led to a higher daily close despite increasing overbought conditions. Monitor the horizontal range between 1.3298 and 1.3452.

"The region between 1.3417 and the annual high is expected to see a fair degree of resistance and should likely offer a reasonable short entry opportunity in the near future."

Euro exchange rates underpinned by the German economy

The fundamental picture for the Eurozone and the shared currency continues to improve; once more it is the German economy that leads the way.

Thomas Harjes at Barclays talks us through the latest economic releases saying:

"The IFO business climate rose by a stronger-than-expected 1.3 points to 107.5 in August, somewhat better that our and consensus expectations (107.0).

"This marked increase brought the index to its highest level in over a year and was mainly driven by a better assessment of current business activity, which jumped about 2 points up to 112.0, also the best assessment in over a year. Business expectations rose 0.9 points to 103.3.

"The August PMI (flash) and IFO business surveys signal strong growth momentum for the German economy in Q3 and the outlook is bright, also reflecting firmer global demand for German goods.

"This fits well with our view that the German economy will maintain its robust underlying growth momentum (+0.5% q/q) in Q3 and coming quarters."