FXStreet (Edinburgh) - The EUR/USD is now coming back to the 1.3530/25 area from session peaks around 1.3550 amidst thin trade and scarce events.



“The speed with which EUR/USD has fallen from above 1.36 to the low 1.35s suggests a low level of market confidence on Europe. The recent run of soft data will not have helped (our Eurozone data pulse index sank to 36.7% last week, a low since May 2013) and the first of the TLTROs in Sep is now not that far away. A break of 1.3450 would suggest this next down leg could take EUR into the low 1.30’s. Positioning should slow the decline though, with IMM specs holding the largest shorts in 14 months (though not at all extreme)”, noted analysts at Westpac Global Strategy Group.



In addition, Karen Jones, Head of FICC Technical Analysis at Commerzbank, observed the pair “came under increasing downside pressure last week and by Friday had started to erode the 2 year uptrend, this week at 1.3525… The outlook is neutral to negative while trading below the 55 and 200 day moving averages at 1.3637/77”.



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