EURUSD Price: Renewed Downward Pressure Hints at New Lows
EURUSD and German Growth:
- The German economy will grow by just 1% in 2019.
- The EURUSD 1.1300 level continues to hold but for how long?
EURUSD Likely to Break Below 1.1300 and Test sub-1.1200
The constant flow of bad economic news in the Euro-Zone has yet to fully impact the single-currency which currently trades around 1.1320. Respected German newspaper Handelsblatt ran a sourced report late Thursday which said that the German government had downgraded growth to just 1% in 2019, down from a prior 1.8% projection just a few months ago. This figure coincides with a report out just over a week ago from the German business body BDI which said that a disorderly Brexit would hammer German growth.
Sentiment reports out this week have also highlighted the current weakness in the Euro-Zone and more may be to follow today when German IFO data is released. Expectations are for further falls and more negative news for the Euro-Zone’s economic engine. The ECB professional forecasters also release their latest views on Friday morning.
IG Client Sentiment currently gives us a mixed trading bias despite retail data showing traders long EURUSD by a ratio of 1.84 to 1 (64.7%). Retail traders have remained net-long of EURUSD since January 10 when the pair traded near 1.1508.
EURUSD continues to press the 1.1300 level without a decisive move lower. Any time the pair break below here they rebound, although these bounce-backs are looking weaker. A clean break below 1.1300 opens the way to the 1.1210-1.1220 area seen back in November before the important 61.8% Fibonacci retracement level of the January 2017 – February 2018 move comes into play at 1.1186. If things turn very bearish for the pair, the January low around 1.0340 would retrace the whole rally.
EURUSD Daily Price Chart (June 2018 – January 25, 2019)
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