EUR/USD analysis: risking new yearly lows
|EUR/USD Current Price: 1.1274
- EU Industrial Production fell in December by more-than-anticipated, reviving concerns about an economic slowdown.
- Germany and the EU will report preliminary Q4 GDP this Thursday; the numbers could fuel EUR's slide.
The American dollar returned to its bullish path after Tuesday's downward corrective movement, appreciating against most major rivals. The EUR/USD pair, which reached 1.1341, fell to 1.1272 early US session, spending it consolidating nearby. Dollar's comeback was a result of a mixture, between encouraging US macroeconomic and political news, and poor EU and UK data. Industrial Production fell in the Union in December by more-than-anticipated, down by 0.9% MoM and by 4.2% YoY, while the UK inflation fell below 2.0% in January taking off pressure on the BOE. As for the US, inflation surprised to the upside, holding at 2.2% YoY in January, despite remaining flat monthly basis. In the political front, market talks indicated that US President Trump is willing to sign the latest Congressional deal to fund the government and avoid another partial shutdown.
Germany and the EU will report their preliminary Q4 GDP this Thursday, foreseen up 0.1% and 0.2% respectively quarterly basis. The Union's slowing growth has been one of the reasons for the latest EUR weakness, and worse-than-expected figures could exacerbate its decline. The US, on the other hand, will report December Retail Sales and January PPI, alongside the usual weekly unemployment figures.
The pair retreated sharply after nearing the 38.2% retracement of the 1.1488/1.1257 slide at 1.1345, now trading also below the 23.6% retracement of the same slump at 1.1310, which suggests that the pair could extend its decline beyond the bottom of the mentioned range. Technical readings in the 4 hours chart support such a downward extension, as the pair returned below a bearish 20 SMA, now heading south around the latest Fibonacci retracement, while the 100 and 200 SMA gain downward traction far above the shorter one. Technical indicators pared their early declines but remain within negative levels, also skewing the risk to the downside for the upcoming sessions.
Support levels: 1.1260 1.1215 1.1170
Resistance levels: 1.1345 1.1375 1.1410
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.