EURUSD: Further weakness ahead
European bond yields declined again yesterday – especially in the periphery – as markets continue front-running what they expect to see announced at the European Central Bank's Governing Council meeting and press conference on September 4: a quantitative easing program. See my earlier article on this situation: Avoid trying to bottom pick in EURUSD.
Management and risk description
The EUR's downtrend persists and despite being “oversold”, there is still opportunity for further weakness ahead. In the short term, I suspect resistance at 1.3185/1.3200 now contains for a test of the low 1.3100s, then 1.3065 (with potential to extend the decline towards the low 1.2900s over the coming days – refer to the daily chart below).
Entry: Selling EUR about 1.3175
– Edited by Gayle Bryant
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