FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank explained that the EUR is weak, having fallen to a fresh 8‐month low in the early European session.
"Economic data releases were soft and suggest that tensions with Russia are proving a weight on the outlook."
"German factory orders lived up to their typically volatile pattern, falling 3.2%m/m and –2.4%y/y; while Italian industrial production was better than expected but the economy unexpectedly contracted by –0.2%q/q and –0.3%y/y in Q2. Accordingly, leading intotomorrow’s ECB meeting there is building concern over the economic outlook in Europe. We expect a relatively dovish sounding ECB but with no policy action."
"EUR/USD short‐term technicals: bearish— all technical studies warn of downside risk, with the currency breaking to fresh 8‐month lows and trending aggressively lower. The RSI at 27 suggests oversold levels; however this warns of only a period of stability and not a change in trend. Support lies at the psychological 1.3300 while resistance comes in at today’s open of 1.3376."