EUR/USD: The beginning of a new leg lower - Rabobank

According to analysts from Rabobank, recent moves in the EUR/USD pair suggest that it is the start of a new leg lower. 

Key Quotes: 

“The break low in EUR/USD has this morning taken the currency pair to its weakest level since mid2017. The move lower is significant technically since the break out from the recent sideways trading channel marks the start of a new leg lower.”

“There is a short term support level close to current trading levels. Key technical support now lies in the EUR/USD1.1187 area, which marks a Fibonacci retracement level."

“While concerns about European exposure to Turkey provided the trigger for the break lower in EUR/USD, we would argue that the EUR was already weakened by the dovish policy bias of the ECB and also by the renewed focus on the Italian budget which has last week already created some anxiety in peripheral bond markets.”

“We have been bearish on EUR/USD since March, however, the pace of the recent drop has taken us by surprise.”