EUR/USD May Fall on Eurozone Consumer Confidence Data
EUR/JPY, Coronavirus, Eurozone Consumer Confidence Data – Talking Points
- Euro may fall if consumer confidence data spooks markets
- Eurozone facing deep recession as coronavirus spreads
- EUR/USD broke key support, may resume prior downtrend
US equity futures pointed higher heading into Asia’s Monday trading session after reports showed coronavirus deaths from countries with the highest infected rates slowed. Meanwhile, Brent plunged over nine percent after tensions between Russia and Saudi Arabia resurfaced over the weekend. US President Donald Trump’s Coronavirus Task Force held a press conference but markets appeared unphased by the content of it.
Euro May Fall on Eurozone Consumer Confidence Data
The Euro may face selling pressure if Eurozone Sentix Consumer Confidence data for April underwhelms and reinforces concern about a deep regional recession. Estimates are currently pegged at -37.5, significantly below the prior -17.1 print. If the actual data falls in line with the forecast, it would market softest reading since the 2008 financial crisis.
Data out of the Eurozone has been drastically underperforming relative to economists’ expectations amid the unprecedented virus-induced disruption. Eurozone finance ministers will be meeting on Tuesday to discuss measures to combat the virus, though political deliberations may weigh on the Euro. Consequently, the importance of the event could reduce volatility elicited from the confidence data. Read more about it here.
EUR/USD Technical Analysis
EUR/USD is approaching a floor at 1.0783 after it broke below a key support range that may be the catalyst behind a resumption of the prior steep downtrend. A compression zone between that floor and potential resistance (labelled as “Downtrend Alpha”) may be forming and could accelerate a selloff if it caps EUR/USD’s gains.
EUR/USD – Daily Chart
EUR/USD chart created using TradingView
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--- Written by Dimitri Zabelin, Currency Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.