© Dukascopy Bank SA
During the previous trading week, the EUR/USD currency pair continued its long-term negative trend, by falling below the 1.27 major level back on Thursday, when the ECB President Mario Draghi spoke in Vilnius, Lithuania, as he said the economy of Eurozone will grow modestly in the second half of this year, helped by ECB stimulus. Still, last week's decline of the pair has already started on Wednesday, when U.S. data on new home sales was released better than expected. Among other important news, American economic growth was revised upwards to 4.6% for the second quarter of this year. Dukascopy traders predicted such a movement of this currency cross, as more than 66% of them waited for the single currency to lose value against the U.S. Dollar.
This week sentiment deteriorated further, as only 22% of participants in our weekly quiz expect the Euro to rebound. In course of the working week, analysts are waiting for a big portion of fundamental data. It includes a flash estimate of inflation in the Eurozone, employment change in the U.S., as well as scheduled ECB decision on interest rates and subsequent press conference of the ECB President. Average prediction for the EUR/USD pair went down below the 1.26 major level, while the pair closed at 1.268 back on Friday. As Jignesh suggests, "The EUR/USD has broken through its 61.8% retracement on the weekly chart and is showing no sign of reversal. This trend can continue to the downside this week. Draghi is up to speak later this week. The market will be looking at him to speak about further progress with the stimulus program." The same negative outlook is assumed by ovidiu_gnt: "EUR/USD at this point is near completion of a flat wave, but it is possible to witness a descent near 1.2200 or lower. The only certainty is that it will not descend below 1.2041."
© Dukascopy Bank SA