Analysts at MUFG Bank explained that improving Eurozone data flow and diminishing downside risk has been offering little support to the euro so far. They expected broad-based weakens in the euro to continue in the near-term.
Key Quotes:
“The EUR continues to trade heavy in the near-term. Last month’s relief rally on the back of progress towards a partial US-China trade deal and the pushing back No Deal Brexit risk has proven short-lived. EUR/USD failed to break above its 200- day moving at 1.1180 and has since fallen back below the 1.1000-level. The next target on the downside will be the early October low at 1.0879. Recent price action for the EUR has been poor as it has failed to derive much support from both an improvement in the economic data flow from the euro-zone and an easing of downside risks to the growth outlook.
“The key question going forward is will this data improvement help stabilise the euro, or even help it turn higher? We certainly believe the change in data flow, while not yet compelling and certainly from a low base will be enough to curtail euro selling.”
“The EUR’s failure to strengthen on the back of the improving euro-zone economic data flow and easing of downside risks to the growth outlook is a bad sign for nearterm performance. It leads us to believe that downward momentum will remain in place in the near-term. A decisive break below the 1.1000-level for EUR/USD would open up the door to a potential retest of the early October low at 1.0879.”
“The ECB’s pledge for looser policy for longer remains a heavy weight on the EUR.”
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Geopolitics once again take centre stage, as UK Retail Sales wither
Nearly a week to the day when Iran sent drones and missiles into Israel, Israel has retaliated and sent a missile into Iran. The initial reports caused a large uptick in the oil price.