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FXstreet.com (Barcelona) - The euro has to some extent decoupled from market risk more broadly, not least as the ECB is expected to ease monetary policy further. "We expect this trend to continue and the euro to weaken further to our 3m target of 1.20, even if overall risk sentiment remains well supported," forecasted Gareth Berry, FX strategist at UBS. "The next serious bout of the Eurozone crisis will likely be unavoidable some time later this year as it becomes clear that politically a banking union remains highly controversial," he added.
As for the EUR/USD, the analyst said that "yesterday's sharp sell-off suggests the risk remains to the downside. Key support lies at 1.2288 ahead of 1.2152. Resistance is at 1.2539."

As an additional note, the strategist points out that "in response to the ECB's decision, Danmarks Nationalbank cut its own benchmark lending rate to 0.2%, while its CD rate was cut to negative 0.2%. Both measures were deemed necessary to maintain the currency board and deter inflows amid Eurozone turbulence."

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