The Euro retreated below 1.1300 to 1.1282 NY close after recording an overnight and 4-week high at 1.13708. The broad-based US Dollar rebound and a largely overbought speculative market weighed on the shared currency. Also weighing on the currency is evidence from recent economic data of Germany’s external demand and industrial production lagging behind domestic consumption. ING Bank’s Chief Economist Carsten Brzeski observes that July data will be key for the future path of monetary policy. The ECB’s policy meeting and rate announcement falls next week.
The latest Commitment of Traders/CFTC report saw net speculative EUR long bets cut to +EUR 98,955 in the week ended June 30. Net total speculative long Eur bets are still at multi-year highs. While net long bets have been trimmed, there has yet to be a decent correction.
EURUSD has immediate support at 1.1280 (overnight low) followed by 1.1250. Immediate resistance can be found at 1.1310 and 1.1340. Look for a gradual drift lower in the Euro with a likely range between 1.1240-1.1320. Prefer to sell rallies.