- EUR/USD has reversed December's rise from 1.1015 to 1.1240.
- The single currency has dropped despite a string of upbeat German data.
EUR/USD has erased almost entire gains seen in December and is fast closing on the psychological support at 1.10.
The currency pair is currently trading at 1.1022, having started the month at 1.1222. The pair had risen from 1.1015 to 1.1240 in December.
Bears on top despite upbeat German data
A majority of German economic data released this month reinforced expectations of a stronger economic rebound in 2020.
An Ifo institute economist on Monday said that it is likely the German economy would grow by 0.2% in the first quarter of 2020, having expanded by 0.1% in the final quarter of 2019.
So far, however, the nascent recovery in the German economy has failed to impress the bulls. As noted earlier, EUR/USD has erased December gains.
The EUR's inability to score gains indicates the market focus has likely shifted to the possibility of a US-EU trade war following the signing of the US-China phase-one trade deal. That said, analysts at Danske Bank think a wider EU-US trade war is unlikely.
Also, the single currency took a beating last week as European Central Bank's President Christine Lagarde sounded more dovish-than-expected.
The single currency may continue to trade on the defense for the rest of the week as safe-haven US treasuries are drawing bids on Coronavirus fears. The bid tone around the US dollar would strengthen if the US Durable Goods, scheduled for release at 13:30 GMT on Tuesday, betters estimates.
Technical levels
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
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.