Chart of the day: Euro bulls watching the buy zone
The euro continues to underperform after six consecutive days of decline. EURUSD is approaching 1.09000 and onto the October lows, where we expect a small buy opportunity.
The pair met its head and shoulders target mid January and has since been offered down. A slew of poor European data amid USD strength and the pair looks quickly headed for the October low at 1.08791. Should price action sink this low, stops will be triggered, which could exaggerate the decline. That said, euro bulls will be watching this as a strong buy zone and I’d expect a small, quick snapback as EURUSD bounces off support.
The USD will remain the place to be, despite a small buying opportunity below 1.09000. The outlook for the euro remains to the downside, with German data underperforming expectations and rising political uncertainty. German Chancellor Angela Merkel’s chosen successor has stepped down, bringing into question the stability of the coalition between Merkel’s conservatives and the Social Democrats.
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