FXStreet (Guatemala) - FX Strategists at the Bank of Tokyo Mitsubishi UFJ notes that the euro remains on the defensive against the US dollar in the near-term with the EUR/USD rate having fallen below key pivotal support at just above the 1.3500-level over the past week.

Key Quotes

"The long-term uptrend from mid-2012 is being challenged."

"The negative of impact ECB monetary easing measures and heightened geopolitical tensions related to developments in the Ukraine are weighing on the euro in the near-term. The release of the latest euro-zone PMI surveys provided some relief revealing that economic growth in the euro-zone continues to strengthen, although the impact of recent developments in the Ukraine have yet to be fully reflected in the PMI surveys."

"However, if German domestic demand is firming that's a positive which would help the euro-zone economy to better weather negative fallout from weakening external growth in Russia. The release of the latest euro-zone CPI report for July will also be in focus in the week ahead."

"The US dollar may derive support from the upcoming FOMC meeting if the Fed acknowledges the recent improvement in the labour market alongside tapering QE by a further USD10 billion. The release of the Q2 GDP report is also expected to reveal that the US economy is rebounding."

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