EURUSD tracking lower


EURUSD has settled in the upper 1.1200s, holding comfortably above the three-month low that was seen at 1.1249 yesterday. The pair has been propped up in the wake of the US Retail Sales miss, which portends downside risk to the economy, although there has also been evident slowing in the Eurozone economy. While the Fed recently made a hawkish-to-neutral policy shift in terms of forward guidance on Fed funds rates, tightening is still happening via the Fed’s ongoing post-QE balance sheet shrinking. This suggests the fundamental bias will be for declines in EURUSD. Resistance comes in at 1.1320 and Support at 1.1249-50. The 20-month low seen last November, at 1.1215, provides an extension. Expectations are that today’s US data slate will be neutral-to-positive for the Dollar.

Stuart Cowell

Head Market Analyst

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