- EUR/USD is down to the lowest levels since June 2017.
- EUR/USD is currently trading at 1.1163 and between 1.1153 and 1.1226.
There is a mixed risk appetite in markets where risk-off flows have benefitted the greenback, in part related to Brexit and Italian government risks, then USA trade policy risk and a pop in oil which was related to the USA’s Iran policy has kicked-in to the price of FX in recent sessions.
However, the euro has long been scrutinised over the economic performance in the EZ, subsequently dragging on the sentiment from the ECB. For instance, last week, the EUR bulls ended up bitterly disappointed when the German manufacturing PMI Index which proved that it remains deep in contraction territory (at 44.5 in April).
German IFO kicks bulls in the teeth when already down
Then, today's IFO sealed the fate for the euro earlier today - as a result, core eurozone yields dipped and the euro eventually played catch up weakening from above the 1.1250s. This surprise drop in the activity in Germany highlights the divergence between economic data in the United States and the eurozone and should keep the euro under pressure for sessions ahead, at least until US durable goods and GDP later this week.
Bulls needed to get above both the 55 and 100 day moving averages at 1.1291/1.1342 but fundamentals have weighed in. Bears are in full control and can look towards the 1.1176 recent low. "Intraday Elliott wave counts are negative and the DMI is also negative. Below 1.1185/75 (61.8% retracement) lies the 1.1110, the May 2017 low and the 1.0814/78.6% retracement," analysts at Commerzbank look for.
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