EUR/USD could retest below $1.26
EUR/USD has managed to bounce back above the $1.26 level in the last couple of days, mainly driven by a correction in the heavily oversold markets rather than any fundamental change in the outlook of the eurozone economies. Yesterday saw Germany posting yet more disappointing economic data that has done nothing to dampen the growing worries about the eurozone’s ability to maintain its recovery.
Tonight will see the latest Federal Open Market Committee minutes released and markets will no doubt use this tool as a guide to the likely timeline for the Federal Reserve to introduce rate rises. FOMC voting member William Dudley's comments last night suggested mid-2015 would appear a reasonable time to start raising rates.
The sentiment is still for lower-lows to materialise and a retest below $1.26 looks on the cards.