FXStreet (Córdoba) - Camilla Sutton, analyst at Scotiabank commented they expect the EUR/USD to fall to 1.3000 by year-end as flows that have supported EUR start to fade and the negative fundamentals to dominate.
“EUR is flat to Friday’s close, trading in the lower end of its recent range and close to the psychologically important 1.35”.
“We hold a year‐end target of 1.30, expecting the flows that have supported EUR to fade and the negative fundamentals to dominate”.
“Data last week was essentially as expected but highlights an environment of low growth, contained inflationary pressures and negative sentiment. Today, a warning from the Bundesbank that the German economy has stagnated in Q2 is concerning. Accordingly the developments have all been fairly negative for EUR, which has added to the downside pressure”.
“A sustained break below 1.35, will likely require a significant catalyst, large enough to shift flows away from EUR”.
“The flash CPI is released on July 31st and outside of geopolitics, a further softening in inflationary pressures is the likely near‐term catalyst”.