Euro Likely to Come Under Pressure

The EURUSD pair continues to hang on to the support region but it has to be said that it is doing so only by the fingernails. The speculation has been growing regarding the state of the Eurozone economy and as the talks begin to grow, it is bound to bring in a lot of pressure on the euro. The NFP did not have much of an impact on the euro but now the focus shifts back to the Eurozone.

Euro Under Pressure

There has been an increasing talk in the Eurozone circles of how the incoming data from that region has been getting progressively weaker over the last few months. This is in opposition to the strong data that was coming in towards the end of last year and this has encouraged the ECB to seriously think about tapering the QE and also bringing in an end to the same towards the end of the year. But with the data tapering off, the tapering of the QE is now being questioned.

It is likely that if the data continues to be weak, then we could be seeing the ECB being tempted to delay the tapering of the QE as then it would run the risk of pushing the Eurozone deeper into recession. This delay would then weaken the euro and all the push higher would end up being a difficult thing for the bulls to sustain and this is the reason why we could see the euro moving lower.

The strength of the dollar has not been as much as was expected but the weakness in the euro could be the trigger that the bears are looking for, to push the prices lower through the support region. If the pair breaks through the 1.2240 region clearly, then we should be seeing the pair head towards the 1.22 region in due course of time. Looking ahead to the rest of the day, there is not much by way of economic news or data but it is likely that the EURUSD pair would come under pressure due to the above events.