FXstreet.com (Barcelona) - The European session erased the positive undertone seen since the Asian session due to expectations of further monetary easing in China (TD Securities analysts point to a 150bps cut in RRR and two further 25bps cut in the PBoC rate by year end) after the weakening prices, retail sales and industrial production data.
“Along with weaker Eurozone macro-economic data, the ongoing uncertainty about how and when the various support mechanisms can kick in to underpin the weak sovereigns is weighing on the EUR’s performance and undermining the improvement seen over the past week”, wrote the economists, pointing to a EUR/USD breakdown after breaching under 1.2343 support and targeting 1.2250 area.
“From a psychological point of view, the market may need to see a little more obvious weakness in spot before boosting short positions again”, they added.
“Along with weaker Eurozone macro-economic data, the ongoing uncertainty about how and when the various support mechanisms can kick in to underpin the weak sovereigns is weighing on the EUR’s performance and undermining the improvement seen over the past week”, wrote the economists, pointing to a EUR/USD breakdown after breaching under 1.2343 support and targeting 1.2250 area.
“From a psychological point of view, the market may need to see a little more obvious weakness in spot before boosting short positions again”, they added.
