EUR in Friday morning sell-off; long-term outlook for the euro remains negative say Jyske Bank

A look at the latest spot euro exchange rates shows:

The euro dollar exchange rate is half a percent in the red at 1.2987.
The euro pound exchange rate is 0.33 pct down at 0.8538.
The euro Australian dollar exchange rate is 0.4 pct higher at 1.3565.

(Please Note: The above quotes are taken from the wholesale currency markets; your bank will affix their own discretionary spread to the numbers. However, an independent FX provider will guarantee to beat your bank's offer thus delivering you more currency. Please find out more here.)

Today's data releases hurting the euro

Hitting investor sentiment towards the shared currency was a poor reading from Germany where retail sales fell by 0.4 pct on the month after dropping by an upwardly revised 0.1 percent in March.

The latest inflation data out of the Eurozone - consumer price inflation was far below the ECB's 2 pct target in May, although it ticked up to 1.4 pct from 1.2 pct in April.

Unemployment is also alarmingly high - Eurozone inflation rose to 12.2 pct in April marking a new record since the EU's statistics office started collecting data on the countries in 1995.

Technical outlook for the euro dollar exchange rate suggests further weakness to come

Jyske Bank analyst Leander Dreyer today told his clients that he is a buyer of the shared currency in the short term but the longer-term outlook favours the US dollar. Dreyer also acknowledges hefty volatility at present which makes predicting the near-term direction for EUR tricky:

"EUR-USD is very volatile in this period. The reason is that currently EUR-USD is a strong residual of relatively large movements in the other major cross rates, while at the same time EUR-USD is affected by the month-end flow, which tends to push the cross rate into either overbought or oversold levels on an unsustainable basis."

Dreyer's long-term view on the euro dollar exchange rate is negative.

"Our short-term recommendation will catch a correction in the downtrend. Our long-term EURUSD target is still below 125. If EURUSD closes below 127.50, the cross rate leaves a top formation referred to as a shoulder-head-shoulder formation, which often means that there is room for declines of several figures."