Wij gebruiken een aantal cookies om u de best mogelijke browserervaring te bieden. Door deze website te blijven gebruiken, gaat u akkoord met ons gebruik van cookies. U kunt hier meer lezen over ons cookiebeleid of op de link klikken onderaan iedere pagina van onze website.
EUR/USD back below crucial support level
Euro weakness was always likely to return to the fold at some point, given the Greek cloud that hangs over the single currency, along with a quantitative easing programme which is just in its infancy. However, the recent weakness in the dollar has unwound over 25% of the selloff in EUR/USD seen throughout the second half 2014 and Q1 2015, which made many bears question how long this resurgence was going to last for. That being said, Friday provided a clear indicator that the long-term downtrend looks set to resume, with a break below $1.105 which marked the neckline of a double-bottom formation back in March/April.
With the release of core durable goods orders later today, we are provided with a good idea of whether the US is finally going to pick up following a poor Q1. Unfortunately the adverse weather conditions can only explain so much and, should we continue to see weak figures, this has to be considered as a possibly more deep-rooted issue rather than the transitory explanations provided by Janet Yellen and co. With that in mind, further weakness in the durable goods and consumer confidence figures later today could bring yet more dollar strength as the rate hike perceptions are pushed back yet further.
Irrespective of whether it is fundamentally driven or not, I think that with a price below $1.105, the picture looks bleak for the euro and therefore a return to $1.06 seems likely in the coming weeks.