EUR/USD Sits at 1.05 Amidst Widespread Bearishness

The euro sank to a fresh 12-year low early on Monday after a recent bounce was met with fresh selling interest in a sign that investors were still very bearish on the common currency.  It fell as far as $1.0457 early in Asia, having closed below $1.0500 on Friday for the first time since January 2003. It has since drifted back to $1.0498.

“While we have hit our mid-year EUR/USD target of 1.05 … we see no reason to fade the downtrend,” said Elsa Lignos, senior currency strategist at RBC Capital Markets.  “Our technical team highlights rallies to resistance at 1.0765 as a selling opportunity, targeting 1.0073.”

Last week, the common currency skidded 3.2 percent, suffering its biggest weekly fall since September 2011 as the European Central Bank kicked off its 1.1 trillion euro bond-buying stimulus program.  Against the yen, the euro fetched 127.48, holding near a 21-month trough of 126.85 set on Friday.


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