EURUSD Price Breaks Below 1.1300 on ECB Growth Concerns Rumor
EURUSD Price, Chart and ZEW Analysis, ECB Concerns:
- EURUSD unmoved on ZEW data but dips on Reuters ECB growth forecast rumor.
- Euro seemingly capped at current levels; client sentiment is bearish.
The latest German and Euro-Area ZEW data paints a mixed picture with sentiment pushing higher while the assessment of the economic situation in Germany deteriorates further.
According to ZEW President Achim Wambach, ‘The slight improvement recorded by the ZEW Indicator of Economic Sentiment is largely based on the hope that the global economic environment will develop less poorly than previously assumed. The postponement of the Brexit deadline may also have contributed to buoy the economic outlook. By contrast, the latest figures regarding incoming orders and industrial production in the German industry point to a rather weak economic development’.
The ZEW data had little impact of the single-currency which post-release fell suddenly on Reuters ‘sources’ headlines which said that several ECB members doubted projections of a growth rebound in H2 and some questioned the accuracy of the forecasting models. While still only a rumor, if growth projections are under question, as well as the modelling, the single currency may turn lower-for-longer and re-test recent lows.
EURUSD printed a low of 1.1279 straight after the rumor hit the screens and briefly broke below the 200-day ma. Support sits at 1.1216 before the 1.1176, the recent 22-month low.
EURUSD Four-Hour Price Chart (March – April 16, 2019)
Retail traders are 52.8% net-long EURUSD according to the latest IG Client Sentiment Data, a bearish contrarian indicator. However recent daily and weekly positional changes give us a stronger bearish contrarian bias.
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