EUR/USD hits fresh weekly lows, below mid-1.1300s

Haresh Menghani FXStreet

• Disappointing Euro-zone PMI prints prompt some aggressive selling on Friday.
• Investors scale back ECB rate hike expectations and add to the selling pressure.
• Technical picture support prospects for an extension of the intraday bearish slide.

The EUR/USD pair extended its intraday retracement slide and dropped to fresh weekly lows, below mid-1.1300s in the last hour.

The pair continued with its struggled to make it through the 1.1420-30 strong resistance and met with some heavy supply following the disappointing release of flash Euro-zone PMI prints for Nov., in particular from the region's largest economy - Germany.

Weak German and Euro-zone PMI data prompted investors to further scale back expectations of an ECB 2019 interest rate hike and prompted some aggressive selling around the shared currency.

As cited by ECBWatch, money market futures dated to ECB's December 2019 meeting now price in around 88% chance of 10 bps rate hike, down from 95% seen earlier this week.

Adding to this, a fresh wave of sell-off in oil prices prompted some risk-off trade and provided a minor lift to the US Dollar's relative safe-haven status against its European counterpart, which exerted some additional downward pressure on the pair.

Meanwhile, possibilities of some short-term trading stops being triggered on a sustained break below the 1.1365-60 region, previous weekly low, might have further collaborated to accelerate the downfall.

Hence, a follow-through weakness, led by some fresh technical selling amid absent relevant market moving economic releases from the US, now looks a distinct possibility on the last trading day of the week.

Technical levels to watch

As Yohay Elam, FXStreet own Analyst writes: “Support awaits at 1.1355 which supported the pair early in the week. 1.1300 used to be a double bottom and 1.1215 is the 17-month low.”

“Resistance awaits at 1.1395 which supported the pair late last week. Breaking above the 200 Simple Moving Average which is just above 1.1420 is critical to moving up. 1.1475 was the peak at the wake of this week. 1.1500 is the peak seen in early November,” he added further.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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