Article by AlgosysFx Forex Trading Solutions
In the previous European trading session, the Euro lost against the US dollar after a report showed that Euro Zone exports in July slowed down, giving rise to speculations of an interest rate cut by the European Central Bank before this year ends. The export data showed the risks that the Euro Zone could fall into recession in the third quarter as exports contracted by 0.2 percent year-on-year in the second quarter.
The single currency is expected to decline in today’s European trades before the release of the German ZEW Economic Sentiment report which is expected to show that investor confidence remains in the negative territory. Recent polls also showed that most of the Germans are not in favor of the Euro, and support from the French population is already weakening. According to a poll published by German newspaper Die Welt, and as reported in Reuters, 65 percent of Germans think that they would be better off if it was not part of the Euro, while 49 percent of the Germans believe that if their country was not part of the European Union, it would be better off. A poll published by French Daily Le Figaro also showed that 65 percent opposed ditching the Euro, while 64 percent, if they had to vote for it, would reject it.
Although the Euro got a boost from the Federal Reserve’s plan of another round of QE, sentiment is likely to weaken, considering the many uncertainties that surround the region. Considering these factors, a short position for the EUR/USD pair is recommended in today’s trading exchanges.
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