EUR/USD Current Price: 1.1362
- IMF downgraded global growth forecast for 2019 to 3.5%.
- German ZEW survey printed better-than-expected results but still indicate deteriorating economic conditions.
Dull price action across the FX board continued this Tuesday, with speculative interest struggling to find a reason to sell or buy a certain currency. The EUR/USD pair traded inside a measly 40 pips' range, although it settled a lower low for the week at 1.1335, returning afterward to its comfort zone around 1.1360. Adding to the usual concerns, the IMF Chair, Christine Lagarde speaking at the World Economic Forum in Davos, said that economic expansion is losing momentum, cutting the organism's global growth forecast for 2019 to 3.5%. For sure, her words weren't a surprise but worked as an incentive for those turning to safer assets.
The macroeconomic calendar didn't offer relevant figures, but those that were out exacerbated the negative mood, as the German ZEW survey showed that business sentiment remains depressed both, in the country and the Union, with the index coming at -15.0 and -20.9 respectively. Things were no better in the US, as Existing Home Sales declined by 6.4% MoM in December, far worse than expected. Meanwhile, the US government partial shutdown continues, with US President Trump reportedly saying that is up to Democrats to close the matter. The EU will release January preliminary Consumer Confidence, forecasted at -6.5 vs. the previous -6.2, while the US will only report some minor mortgage and manufacturing data.
The pair shows little change for a second-day in-a-row, but the bearish case keeps strengthening, as lower highs keep coming alongside fresher lows. The key to the upside is now 1.1380, the 61.8% retracement of the latest bullish run broken last Friday, with bears holding the grip as long as the price remains below it. The short-term picture favors another leg lower, given that, in the 4 hours chart, and despite the latest recovery, the pair continues developing below a bearish 20 SMA, which falls below the larger ones, as technical indicators hover within negative levels, far from pre-announcing an upward extension ahead.
Support levels: 1.1350 1.1310 1.1275
Resistance levels: 1.1390 1.1425 1.1450
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