Based on the fiber’s (EURUSD) daily chart, it looks like that the euro is poised for another fall against the greenback. As you can see, the pair has rallied back above 1.2100 after hitting a low of 1.1876 when it broke down from a descending triangle formation. Though if you notice, the triangle’s former support is now acting as a resistance that is preventing the pair from moving higher. In case this support-turned-resistance gets breached, the 3 Fibonacci retracement levels that I marked are still present to possibly halt the euro’s ascent. On the flip side, the pair could revisits its 2010 low or even mark a new one since its minimum downside target from its breakdown from the triangle has not been met yet (check my previous post on the pair here). Since the EUR is on a longer term downtrend, it has a higher chance of moving lower in the next coming days or weeks against the US dollar.
Fundamentally, most of the assets were actually trading in the red in last Friday’s US trading due to the unexpected 1.2% slide in the US’s May headline retail sales. But equities as well as the euro eventually got some support to lose the day back in green from the better than expected University of Michigan Consumer Sentiment report for the month of June. The account came in at 75.5 against the market’s 74.5 forecast. Still, given the uncertainties around the global market particularly in Europe, the riskier assets like equities and the non-dollar currencies like the euro could yet again face some selling pressure. remember that Greece and its neighbor countries are very much far from getting out of the debt woods. Until they do, the euro could conitnue to weaken versus its major peers.
On Tuesday (June 15), Germany’s Zew economic sentiment index for June will be on the deck. The index is seen to reach 48.7from 45.8. But due to the latest debt fears in the euro zone which now inclaudes Hungary, the index would more likely miss its target. If it does, the euro could take a another hit.
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