The EUR/USD has failed to find any sustained strength along the Asian hours. The pair opened at 1.3088 following early pressure through the interbank trading on negative news out of Europe.
The impasse hit by EU Finance Ministers over the weekend on how to share the cost of any future bank collapse in the EU, ECB's Weidman suggesting that the Outright Monetary Transaction Mechanism aka OMT will have limited firepower if ever used, and the BIS warning that central banks have reached unacceptable levels of debt and that exit strategies to its easing policies should take place, all affected the EUR/USD sentiment.
After collecting the views of several market commentators early in Asia, one striking conclusion is the majority expect the EUR/USD to continue its trend lower along the week, with Marc Chandler, Global Head of Currency Strategy at BBH, saying "the highs printed by the EUR/USD last week pre-FOMC are significant, as they mark the end of the correction off the year's lows."
Technically, Chandler sees a potential recovery in the euro "likely capped in the $1.3220-60 range", while on the downside, "the next target for the euro is $1.3060 and then $1.2975" Chandler adds.
Chris Capre, Founder at 2ndSkies, is also bearish on EUR/USD, saying that "With the break and close below both 1.3182 (key level), and the daily 20ema, I'm only looking for sell signals now. I'll short on a pullback towards 1.3182 and the daily 20ema, targeting 1.3090 and 1.2975." Only a close back above 1.3250 this week would negate the bearish view, Capre said.
However, Sean Lee, Founder at FXWW, is one if the few which has a more cautious approach towards the EUR/USD.
"The market loves to be bearish EUR/USD but recent history suggests that the bears will struggle to maintain momentum for any length of time" said Lee, who adds "There were times in recent months when the reports out of the EZ were much worse than is currently the case and yet the EUR/USD is still trading above 1.30."
Lee reminds us that the daily technical outlook is still showing a modest uptrend, concluding that "the interbank market reports that the sellers are mainly leveraged speculators whilst the buyers are more structural, real-money or Sovereign."