Euro Weekly Price Forecast: Fundamentals, Data Suggest a Terminal Decline
Euro Weekly Price Forecast, Analysis and Chart:
- German data miss expectations and weigh on the Euro.
- Inflation and GDP numbers next week are key.
EUR/USD Falls Through Obstinate Support
Five down days in a row, taking a multi-month support level out along the way, spells trouble for EUR/USD going forward. A slew of Euro-Zone and German data this week disappointed and suggests that the single-blocks’ economy remains weak despite calls at the start of the year to the contrary. While the charts remain weak, traders may benefit by waiting for any bounce, however small, before making a trading decision. As the most traded FX-pair, EUR/USD is unlikely to see large swings in price - due to its liquidity – but a slow grind lower looks the likely path of least resistance.
The worry for Euro bulls is that economic data may well get worse before it gets better, and next week’s releases will give traders a better idea of the current weakness in the economy. Next week sees the release of provisional Q4 GDP for Germany and the Euro-Zone and there is a very real chance that this may miss the feeble 0.1% growth expected and come in flat. There is also Euro-Zone industrial production data, which if the recent readings in Germany are replicated, will likely be worse than November’s -1.5%.
EUR/USD came under bearish pressure this week from both sides of the pair, with the Euro weakening while the US dollar put in an impressive rally and hit a multi-month high. Big figure support at 1.1000 was taken out with ease while the support zone between 1.0981 and 1.0990 finally broke, and a close under here would add conviction to the move. These levels would then turn to short-term resistance and would only likely be breached if the US dollar weakens. Below here, 1.0926 before 1.0879 if bearish momentum takes a firm grip of the pair.
EUR/USD Daily Price Chart (July 2019 – February 7, 2020)
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