Wednesday, July 23, 2014

Weak Euro coincides with ECB expectations

Euro slid to eight month lows against the dollar on Tuesday after data revealed consumer price inflation in the U.S. met expectations in June, which sent investors betting the Federal Reserve may raise interest rates sooner in 2015 than later, especially if the labor market continues to improve.

On Tuesday, the pair dropped below 1.3500, decisively breaking below 38.2% Fibonacci Retracement level to test a very important support near 1.3480 zone. Sustained trading below this support area has the potential to continue exerting pressure on the pair initially towards an intermediate support near 1.3430 level. 

The pair in the near term might continue depreciating towards 1.3350 support level. Meanwhile, any bounce back from this support region now seems to confront with an immediate resistance near 1.3520 area, which if conquered could possibly boost the pair back towards 1.3600 horizontal resistance area.

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