EUR/USD: downside is set to continue
EUR/USD bounced from the 1.2600 barrier on the past week and fell back below the 1.2500 mark. Selling renewed on the back of the disappointing November economic activity indices in euro zone. Mario Draghi added pressure to the pair on Friday, reiterating the ECB readiness to launch QE if needed.
As a result, the pair is currently forming a bearish engulfing candle on the weekly chart. The picture remains bearish below the 1.2600 mark. Next levels to watch below the price are the recent low of 1.2350 and the 1.2250/20 area (200-month MA).
Germany is scheduled to release a block of data at the beginning of the new week. Pay attention to the German Ifo index on Monday and to the CPI on Thursday. On Friday the market attention will be focused on the inflation data for the whole currency block. Further decline in prices will clearly provoke a new strong wave of euro sales.