EUR/USD breaches 1.09 on poor German CPI
|- EUR/USD breaks below 1.09, new 2019 lows.
- German flash CPI surprised to the downside.
- The Greenback records fresh 2019 highs.
The selling pressure around the shared currency has picked up pace in the wake of the German data on Monday, dragging EUR/USD to fresh yearly lows in the sub0-1.09 levels.
EUR/USD weaker post-German results
The pair lost further momentum at the beginning of the week, dropping to the boundaries of 1.0880 after German advanced inflation figures tracked by the CPI came in short of expectations for the current month.
Spot has therefore started its third consecutive week on the defensive, trading in levels last seen in May 2017.
Indeed, German consumer prices are expected to come in flat on a monthly basis in September and rise 1.2% over the last twelve months. Tracked by the broader HICP, prices also disappointed and are seen contracting 0.1% inter-month and advancing 0.9% on an annualized basis.
What to look for around EUR
EUR dropped to new 2-year lows vs. the Greenback in levels just above 1.09 the figure last week, as investors’ sentiment remains sour and without any hint of getting any better, at least in the near/medium term. In fact, the slowdown in the euro area stays far from abated and carries the potential to deteriorate further, as per the latest PMIs in core Euroland and despite the lacklustre improvement in a couple of German sentiment gauges. Speaking of Germany, the likeliness that the country could slip back into recession in the third quarter plus the recent poor prints from the advanced CPI just adds to the already gloomy panorama for the bloc and weighs further on the single currency. The unremitting slowdown in the region does nothing but justify the ‘looser for longer’ monetary stance by the ECB. On another front, potential US tariffs on imports of EU cars remain well on the table, while the Brexit limbo and UK politics adds to the ongoing concerns.
EUR/USD levels to watch
At the moment, the pair is retreating 0.41% at 1.0895 and a breach of 1.0884 (2019 low Sep.30) would target 1.0839 (monthly low May 11 2017) en route to 1.0569 (monthly low Apr.10 2017). On the upside, the next hurdle aligns at 1.1009 (21-day SMA) followed by 1.1109 (monthly high Sep.13) and finally 1.1163 (high Aug.26).
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.