EUR/USD hits 1.3460, fresh year low

By FXstreet.com | July 22, 2014 AAA

FXStreet (Edinburgh) - The shared currency accelerates its downside on Tuesday, quickly dragging the EUR/USD to post fresh ytd lows in the boundaries of 1.3460.

EUR/USD softer post-US CPI

Spot came under intense selling pressure after consumer prices in the US economy rose at an annual pace of 2.1% and 0.3% inter-month, both prints banging on estimates. Core prices missed expectations however, rising 1.9% over the last twelve months and 0.1% on a monthly basis. Next on tap in the US docket will be Exiting Home Sales followed by the regional manufacturing index gauged by the Richmond Fed. In the opinion of Camilla Sutton, Chief FX Strategy at Scotiabank, commented, “investors are cautious on getting caught wrong footed being EUR short, however as the fundamental picture has darkened and the flows into the EUR appear to be fading, EUR is vulnerable to further near-term downside. We hold a Q3 target of 1.34 and Q4 target of 1.30 (below market consensus).

EUR/USD levels to watch

As of writing the pair is losing 0.30% at 1.3482 and a break below 1.3436 (76.4% of 1.3295-1.3894) would target 1.3399 (low Nov.21 2013) en route to 1.3390 (low Nov.13). On the upside, the initial hurdle aligns at 1.3549 (high Jul.21) followed by 1.3572 (high Jul.16) and finally 1.3592 (30-d MA).

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