Last week, the Euro broke below the 1.3500 level against the greenback for the first time since February. As the ECB is still not done with the easing (perhaps public QE if low inflation persists), it is clear that the risk remains on the downside for the single currency. However, we do believe that the decrease will be slow and gradual….
EURUSD is now trading around its 38.2% Fibo retracement (1.2750 – 1.4000) as you can see it on the chart below. We think that the 1.3500 level will act as a strong support, however a higher-than-expected inflation figure in the US this afternoon (expected at 2.1%) could push the pair to lower levels… 1.3470 to begin with.
For those who missed the trend, any bounce back above 1.3600 could be a new good opportunity to start selling the pair.
Data to watch:
Today (July 22): US June CPI YoY (exp. at 2.1%)
Thursday (July 24): EZ July Flash Mfg PMI (expected at 51.7)