Euro bears have already profited from today’s decline as the euro fell 60 pips from our short-entry. The euro will now need to break significantly below the crucial support-level at 1.12 in order to invigorate further bearish momentum. Below 1.1180 we expect the EUR/USD to slide towards 1.1140. Pullbacks are likely to be limited until 1.1280. However, the focus will rather be on the U.S. dollar and important U.S. data such as Retail Sales due for release at 12:30 UTC. Retail Sales are expected to show a slower growth in May and this expectation could weigh on the dollar before the report is due for release.
The pound sterling is currently the most volatile currency and traders' efforts were rewarded once again: As expected in yesterday's analysis, some of the GBP's recent losses have been corrected due to an oversold situation. Consequently, our long-entry has proved to be successful, providing traders a nice profit on Monday. The pound rejected the 1.4330-level and dropped back below 1.42. Given the fact that the 'Leave' Campaign gains ground against the 'Remain' before next week's referendum, traders should generally expect further losses in the GBP. A next lower target could be at 1.40, whereas corrections might be limited until 1.4260.
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