COZfx: Russia imposes sanctions could worsen the Europe’s economic

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COZforex: For the past trading session, the EUR dropped 0.16% against the USD and closed at 1.3361, as European Central Bank President, Mario Draghi, cautioned that the sanctions war against Russia could worsen the economic outlook of the single currency region.

Meanwhile, Russia too has retaliated by putting ban on certain imports from the US and from Europe as well. Yesterday, the ECB kept its interest rates unchanged at 0.15% and indicated that the rates would remain at the same level in view of the current outlook for inflation. The central bank also kept its deposit rate and marginal lending rate unchanged at negative 0.1% and 0.4%, respectively.

In addition, in Germany, Euro-zone’s biggest economy, the industrial production dropped short of expectations and raised concerns over its economy’s performance. The factory production in Germany increased 0.3% in June against the market expectations of 1.4% increase but after registering a 1.7% drop in the previous month. German economy ministry said that the positive trend of the nation’s industrial production would continue. Elsewhere, the trade deficit in France unexpectedly widened to 5.4 billion in June, from 5.1 billion in the preceding month.

In technical analysis, COZforex senior currency strategist Ian • Quigley said, EUR/USD is predicted to find support at 1.3348, and a decline through could take it to the next support line of 1.3310. Meanwhile, the pair is predicted to find its first resistance at 1.3408, and a rise through could take it to the next resistance line of 1.3430.

Going forward, investors would be looking at German trade balance data and the French industrial output, scheduled later in the day.

(COZ forex UK)