The EUR/USD continued its downtrend in the morning session in Asia today. The strong dollar has been blamed for the strong downtrend in the Euro. Traders and investors are closely looking at the developments in Hong Kong which has seen unprecedented riots over the weekends. The strong US GDP report showed that the US economy grew by 4.6 percent which was higher than the consensus estimates bolstered dollar demand.
Fears have resurfaced about Federal Reserve hiking short term interest rates before than expectations which are being seen as a huge negative for volatile currencies like the Euro. Traders and investors would be closely watching the political developments in France and Spain. It has been reported that Catalan government would be holding an independence referendum against the wishes of the central government in Madrid. Economic reports from Europe and US would be closely watched out for in the latter half of the day.
The EUR/USD on the daily charts continues to be in a strong downtrend. The 11th consecutive up-week for the dollar index has seen the eurozone currency face strong selling pressure. The currency pair continues to remain below an important downward sloping trendline and only a move above the trendline would provide any reversal signals. It is imperative for traders to know that the EUR/USD continues to remain below the all important daily moving averages. The momentum indicators for EUR/USD continue to remain in bearish territory showing no signs of a reversal which is indicative of the bears holding the upper hand at the current moment.
Short EUR/USD at current levels for a short term target at $1.25615 with a strict stop loss above $1.28927
Long EUR/USD only if it closes above $1.28927 for a short term target at $1.29100 with a strict stop loss below $1.27760