© Dukascopy Bank SA
Interbank deposits have been reduced. Confidence in banks across the euro zone has been reduced. If banks continue to struggle, then they can't extend credit to the real economy."
- Fitch (based on Reuters)
Pair's Outlook
Pair was sold heavily last week and opened slightly above the 200 and 55-day SMAs. As suggested by the short term technicals pair is likely to bounce from this support levels. Fibonacci 38.2% (February to April, 2013, move) is not likely to stop the pair for long and a rally to the 1.32 is much more likely. In case 55 and 200-day SMAs fails the pair should stop around the 1.30.
Traders' Sentiment
After the weekend traders remain moderately bearish. Short positions on the pair account for 58% of all open positions on the pair. Similar bearishness can be seen in the distribution of pending orders as well. 58% of all pending orders are to sell the single currency against the greenback.
© Dukascopy Bank SA