FXstreet.com (San Francisco) – The euro has traded down into the 1.2300 price zone this Tuesday in Asia, yet remains relatively unchanged from its starting price as investors refrain from taking large positions ahead of China’s June trade numbers.
At the top of the hour, at 0100 GMT, the figures will be closely watched as worries of a deep economic downturn mount. Data on Monday showed CPI and PPI numbers eased more than expected, adding to the case for more PBoC policy action to support the slowing economy.
“Interest to note, the COT report shows past week Euro short were barely reduced suggesting selling into rallies remains the preferred strategy for the pair,” says Valeria Bednarik, Chief Analyst at FXstreet.com. “Bears are still in control,” comments the analyst, “yet some short covering could be triggered if price overcomes 1.2350 static resistance zone.”
If the market pushes above the mentioned resistance area, further resistance lies at 1.2420 (38.2%, 1.2691/1.2255), then 1.2470 (50%, same sell-off). Should the bears continue to dominate, the downside offers support at 1.2285, 1.2250 and 1.2215.