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In their weekly strategy report, analysts at Citibank, explained that they pushed back the rate hike timing of the European Central Bank to the first quarter of 2021 after the latest meeting, which may undermine EUR.

Key Quotes:  

“Investors are equally worried about the broader aggregate Eurozone data momentum and potential for recession risks. Eurozone current account surpluses, Chinese easing and fading US growth outperformance may underpin EUR in the medium and long term.”

“EUR/USD continued to retreat while Slow Stochastic did not follow with higher lows. A bottom divergence pattern may send EUR higher, with resistance at 1.1514 and support at 1.1177.”

“The dovish Fed, China’s policy stimulus and likely Chinese economic stabilization in 3Q may weaken USD in the medium and long term, which may support EUR.”