EUR/USD: Risks building for sustained sub-1.10 levels - Westpac

Research Team at Westpac, suggests that the EUR/USD going nowhere fast but risks building for sustained sub-1.10 levels in coming weeks.

Key Quotes

“July 21 ECB a likely trigger, Draghi will reiterate downside risks given Brexit and may pre-announce further easing such as a QE extension beyond March 2017. Until then however EUR may well firm toward 1.12 or so – the USD is struggling to develop any traction in the face of consistently decent data and that story is unlikely to change near term.

Potentially stronger US data in coming weeks likely continues to boost risk appetite moreso than Fed hike expectations and while AUD, NZD, EM et al benefit more EUR is nonetheless a marginal beneficiary.

Technical: On balance signals pointing to EUR/USD lower. Breaking out of the uptrend and weekly charts looking rather bearish.  Resistance around 1.1180.”