EUR/USD tumbles to fresh 2019 lows near 1.1280
|- The pair drops further and prints 2019 lows.
- The greenback, instead, trades in yearly highs above 97.00.
- Hopes on US-China trade deal keep rising ahead of talks.
EUR/USD keeps gaining downside momentum and is now clinching fresh 2019 lows in the boundaries of 1.1280, opening the door for further weakness to December lows at 1.1269.
EUR/USD weaker on USD-buying
It’s all about the greenback today. In fact, a fresh wave of buying interest is now lifting USD to fresh yearly peaks beyond 97.00 the figure when measured by the US Dollar Index (DXY), keeping the pair under heavy downside pressure in sub-1.1300 levels.
In addition, the rebound in US yields have been sustaining the sharp up move in USD/JPY, exacerbating the selling mood in the Japanese safe haven and thus morphing into extra oxygen to the buck.
Further out, speculations over a positive outcome at the US-China trade talks due later in the week seem to be also collaborating with the rebound in USD/JPY.
What to look for around EUR/USD
Both the ECB and European Commission are now confirming the slowdown in the euro bloc following their recent revised projections for economic growth and inflation, acknowledging at the same time that the ongoing deceleration in fundamentals could be longer than expected. Adding to this picture, Germany could have likely entered into recession in Q4, while the apparent recovery in the autos sector in recent months would not be enough to spark the immediate rebound in the first economy of the bloc. In addition, political concerns remain well and sound following the recent Italy-France dispute with the ‘yellow-vests’ in centre stage ahead of the key EU parliamentary elections in May. All in all, the expected tightening by the ECB appears highly unlikely this year, with the added risks stemming from Brexit and the US-China/US-EU trade spat.
EUR/USD levels to watch
At the moment, the pair is losing 0.23% at 1.1293 and a break below 1.1282 (2019 low Feb.11) would target 1.1269 (monthly low Dec.14 2018) en route to 1.1215 (2018 low Nov.12). On the other hand, the next hurdle emerges at 1.1356 (23.6% Fibo of the September-November drop) seconded by 1.1387 (55-day SMA) and finally 1.1425 (100-day SMA).
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