- EUR/USD loses the grip and tumbles to sub-1.10 levels.
- German flash PMI missed estimates in September.
- US PMIs, Fedspeak will keep the attention on USD later.
The selling pressure around the European currency is picking up pace on Monday and is now dragging EUR/USD to fresh daily lows in the sub-1.10 area.
EUR/USD weaker on PMIs, looks to Draghi
The pair is adding to Friday’s losses and trades below the critical support at 1.10 the figure in response to poor prints from flash PMIs in Euroland and the firmer note surrounding the Greenback.
EUR sinks deeper into the negative territory on Monday after advanced manufacturing PMIs in France and Germany came in below estimates for the month of September at 50.3 and 41.4, respectively.
Later in the session, the single currency is expected to remain under the microscope, as President Mario Draghi will testify before the Committee and Monetary Affairs of the European Parliament.
What to look for around EUR
EUR is facing extra downside pressure at the beginning of the week and threatens to extend the move to 2019 lows in the 1.0920 region, as any recovery in the German economy appears to take longer than expected in light of the recent flash PMIs. The unremitting slowdown in the region justifies the looser for longer monetary conditions by the ECB and adds to the probability that the German economy could slip into technical recession in Q3. Adding to this gloomy scenario, potential US tariffs on imports of EU cars remain well on the table, while persistent uncertainty around Brexit adds to the downbeat outlook.
EUR/USD levels to watch
At the moment, the pair is losing 0.42% at 1.0971 and a break below 1.0925 (2019 low Sep.3) would target 1.0839 (monthly low May 11 2017) en route to 1.0569 (monthly low Apr.10 2017). On the flip side, the initial hurdle emerges at 1.1033 (21-day SMA) followed by 1.1109 (monthly high Sep.13) and finally 1.1163 (high Aug.26).
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