Euro Feels The Heat

July 2005 | Currency Forecast

As we suggested in the May Short-Term view, the euro broke below US$1.2500/EUR and fell through US$1.2000/EUR to a low of US$1.1866/EUR. In fact we have held a bearish stance towards the single European currency since the US$1.3000/EUR region. Support exists in the US$1.1800/EUR area, and we anticipate a period of consolidation for the exchange rate after the declines of the past three months. Any move through US$1.1800/EUR though would set up a move to the next support level at US$1.1500/EUR.

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