EUR/USD: Downside prevails as we approach June’s consolidation area
EUR/USD continues to grind lower this morning and it is currently hovering around the bottom of significant support from June’s consolidation area at 1.27. With the fiscal cliff pushing the US Dollar higher and the Greek issue still unresolved ahead of a quiet week from a data point of view, we expect the risk-off sentiment to prevail. From a technical point of view, the negative outlook is further supported by the downtrend line that is capping RSI on the 30 min chart. We are clearly in a bearish market with any upside likely to be limited to very short-term. At 1.2669 at the time of writing a break below 1.2655 would put the next support level at 1.2605 in focus. Only a move above 1.2775 could delay the downside, but this is hard to imagine without a major fundamental catalyst. On the economic data front things are a little quiet with the German ZEW survey due for release this morning.
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