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Euro looking vulnerable

EUR/USD briefly ventured below $1.0600 and shorting interest seems to have accelerated ever since it broke below uptrend support at $1.08 last week.

Euro
Source: Bloomberg

There is a bit of stability here early in Asia around $1.0600 but the fundamentals still support further weakness in the pair. We have the ECB meeting this week but nothing new is expected.

Perhaps Mario Draghi’s press conference will bring some commentary around how the economy is performing. Given the recent rebound in some readings, perhaps Mr Draghi will allude to an improving picture.

If this leads to a firmer euro, I feel this would present some fresh selling opportunities. Neckline support was broken at $1.0700 and this level has since turned into resistance.

I feel traders could look at fresh selling opportunities in the pair on a rally back into $1.0700. My potential targets will be back to March lows below $1.0500.

EUR/USD
Click to enlarge

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