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EUR/USD set for tougher 2015
EUR/USD has lost 10% year to date, as a crumbling eurozone and a bounce back in the US ensured the currency pair felt the pressure from both sides of the Atlantic. The problems that Europe faced this year will be carried into next year, and the recovery in the US may be hindered by a global slowdown.
In January the European Central Bank meeting and the Greek election will provide volatility for EUR/USD, and both events are likely to keep the pressure on the single currency. As I previously stated, the TLTRO carried out by the ECB earlier this month wasn’t enough to quash the QE speculation, and in light of the poor Spanish CPI data yesterday deflation will be on the agenda next year.
The $1.21 level is the initial downside target, and looking to the New Year dealers will be focused on $1.20. If we see a pullback it is likely to run into resistance at the 200-hour moving average at $1.2215.