EUR Analysis and Talking Points
- Eurozone Sentix falls to the lowest level since February 2017
- Investor morale deteriorates amid concerns over US trade policies.
See our Q2 EUR forecast to learn what will drive the currency through the quarter.
Eurozone Sentix Investor Confidence fell for a 4th consecutive month to its lowest level since February 2017 to 19.2 in May, missing expectations of 21. The report stated that investor morale had been hit by concerns over the introduction of punitive US tariffs, resulting in lower economic expectations, alongside a slightly weaker assessment of current conditions.
Elsewhere, the Sentix survey for Germany also saw a decline for the 4th month in a row, falling to the lowest level since September 2016. This somewhat mirrors the recent run of soft economic data points from Germany, which has led to a downgrade in forecasts for German growth prospects.
However, despite the soft report, price action in the Euro will likely by dictated by Thursday’s US CPI report, while comments from Fed Chair Powell on Tuesday at 0715GMT will also garner attention for traders.
EURUSD PRICE CHART: TIME FRAME (AUGUST 2017- MAY 2018)
In terms of technical levels of note for EURUSD, downside support in the near-term reside at Friday’s lows of 1.1910, whereby a close below this could set up a move towards 1.18. On the topside, the 200DMA is situated at 1.2050, while the 2017 high sits at 1.2093.
IG Client Positioning Sentiment states that 53.7% of traders are net-long. For full client positioning click here
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
