EUR/USD: fundamental and technical analysis point to a decline of the pair (Maybank)

Maybank notes that the risks on the EUR/USD are on the downside in terms of fundamental analysis and technical analysis.

"The EUR/USD continued to move under bearish pressure as USD strength increased. The bearish movement remains well in our expectations and the EUR/USD may still correct lower in the next few weeks. We reiterate that we see downward risks in the future - potentially coming from Italy (with the risk of early elections), German elections in September (which justify some precaution rather than complacency), a lack of urgency by the ECB to tighten its policy - the ECB considers that the recent improvements are not highly sustainable and we still need to see a more significant recovery. The Fed's determination to tighten monetary policy as planned contrasts with the ECB's lack of urgency and is the return of a divergence in terms of monetary policy. This should serve other factors affecting the EUR/USD.

The daily impulse and the stochastic indicators maintain the downward bias. A rounding-top appears to be forming - this suggests bearish turnaround potential, with probable support at 1.1060 (neck line).

The resistance level is at 1.1280, followed by 1.14."