EURUSD, Daily (Updated)
EURUSD touched fresh 7-month lows of 1.0565, before rallying back over 1.0600, with pre-holiday short covering in play. The EUR, though, is still a bearish market, and with the inevitable interest differential widening becoming more apparent, the USD will continue to grind higher against the EUR over time, until we see a shift in the ECB policy. The next EURUSD downside target (S2) in at 1.0520, representing the April low. Continued downward pressure on the EUR is also supported by speculation of further ECB easing as early as next week’s ECB meeting, following a Reuters report saying central bankers are discussing two tiered charges on banks’ deposits and further bond buying.