EUR/USD prints YTD lows near 1.1015 post-IFO

EUR/USD gives away initial gains on IFO.
Markets’ focus remains on the Wuhan virus.
German IFO missed expectations in January.

Pablo Piovano FXStreet

After moving to daily highs in the 1.1040 region, EUR/USD is now losing the grip and drops to fresh yearly lows in the 1.1020/15 band.

EUR/USD offered on poor IFO

The pair is now accelerating the downside, losing ground for the third session in a row and printing new 2020 lows around 1.1015 after the German IFO survey came in below expectations in all of its components for the current month.

Indeed, the key Business Climate component dropped to 95.9 from 96.3 (vs. 97.0 exp.), Current Assessment ticked higher to 99.1 (99.2 exp.) and Business Expectations inched lower to 92.9 from 93.9.

In the meantime, the pair continues to follow the developments from the coronavirus in China, where it continues to spread and cloud the global growth prospects.

There are no more publications in Euroland on Monday, whereas December’s New Home Sales will be the only release of note across the pond.

What to look for around EUR

The pair stays well on the defensive and trading in levels last seen in December 2019 around 1.1020/15. Dynamics around the buck are expected to remain the exclusive driver of the pair’s price action for the time being along with alternating risk appetite trends in response to developments from the US-China trade front. In the shorter term, investors will also assess news of the Wuhan virus vs. prospects of global growth. On another scenario, the ECB is expected to finish its strategic review (announced last Thursday) by year-end, leaving speculations of any change of the monetary policy before that time pretty flat. Further out, some better-than-expected results in the euro region as of late seem to have lent support to the idea that the bloc could have left the worst behind, although that view looks premature, to say the least.

EUR/USD levels to watch

At the moment, the pair is retreating 0.04% at 1.1019 and a breakdown of 1.1017 (weekly/2020 low Jan.27) would target 1.1000 (psychological level) en route to 1.0981 (monthly low Nov.29 2019). On the flip side, the next hurdle aligns at 1.1068 (100-day SMA) seconded by 1.1089 (55-day SMA) and finally 1.1130 (200-day SMA).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.