EUR/USD: outlook for July 11-17
EUR/USD spend the most part of the past week under pressure, though finding support as the European Central Bank still hasn’t sent a strong signal that it will further ease monetary policy.
In the meantime, the news flow from the euro area is very concerning. After the Brexit vote Italian bank crisis became bigger: more capital went out of the sector, so that the lenders are now in desperate need of financial rescue. Italian bank stocks are down about 50% or more this year. Italy’s Prime Minister Matteo Renzi wants to help the national banks with a state bailout, but European Union authorities are against that as it contradicts the new rules of the EU. As a result, there’s a risk that the situation in Italy will trigger another euro area wide crisis.
The European finance ministers will meet on Monday to decide whether to fine Spain and Portugal for missing the budget targets. Apart from this the euro area’s economic calendar looks very light with only industrial production on Wednesday and final inflation on Friday having some significance.
In the past week EUR/USD was trading around 100-day MA in the 1.1100 area. Next week we expect the single currency to come under more pressure and slide towards 1.0920. Next support will be at 1.0815/00. Resistance is at 1.1200.