EURUSD: bearish risks persist
The EURUSD pair has been trading close to one-year lows, though made some recovery attempts yester-day. The price is clinging to the 1.14 figure and lacks the impetus to stage a more sustainable and pro-nounced recovery. Chances for a steady rise above the 1.15 barrier are low as this level served as a firm support for a long time.
In the short-term, weaker-than-expected German Q2 GDP data has limited the euro’s local poten-tial, while a better risk sentiment has weakened the upside pressure on the greenback. So the current dy-namics in the pair looks neutral and the risk of a retreat below 1.14 persists.
In a wider picture, much will depend on the developments around lira’s woes. A base-case scenario on this front could send the single currency even lower on the back of exposure of some of the largest euro zone creditors to Turkish crisis. Therefore, as long as the risks from this side persist, the single currency will remain vulnerable and unattractive for the bulls.