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EUR/USD Make or Break?
The euro continues to see one way selling flows as the situation in the EZ deteriorates both politically and economically. Friday’s weak IFO readings suggest that the tensions with Russia are starting to weigh on the business sentiment in the region and that could translate into slower growth in H2 of this year. This week the calendar in Europe is relatively quiet but GE unemployment could be just another data point that could point to weakening growth. Meanwhile in US the NFPs will take center stage at the end of the week and of the jobs numbers continue to show 200K plus monthly gains the market will start to price in much bigger growth rate differentials between Europe and US and that will push the euro to fresh yearly lows.
Having broken below the key 1.3500 support level the euro now targets 1.3350 as the next level for the shorts while the longer term decline could ultimately take the pair below the 1.3000 level. Only a recovery above 1.3650 relieves the downward pressure.