Fundamental Analysis

EUR/USD Techninical Evaluation: Bearish – Ready for EU Information Dump

EUR/USD TRADING STRATEGY – BEARISH

EUR/USD outlook bearish under 1.269

Ready for the EU information dump subsequent week

European turmoil could weigh on the Euro

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The Euro could fall subsequent week after a cascade of key financial indicators are launched which can verify the ECB and IMF’s forecasts of slower European progress. The Euro traded decrease on January 24, opening at 1.1380 and having a each day shut at 1.1307, a mere two pips above the 1.1305 help. This was partly fueled by ECB President Mario Draghi’s announcement that the general outlook has moved to the draw back.

EUR/USD – Day by day Chart

Chart Showing EUR/USD on a Daily Chart

Among the financial studies embrace Eurozone CPI, France’s Shopper Confidence and Italy’s GDP. CPI forecasts had already been lower from 1.7 to 1.6 p.c by the ECB, and the Yellow Vest Protests in France have despatched French bond yields hovering and negatively impacted financial information. Italian GDP can be carefully monitored given the precarious state of the nation’s economic system.

Not solely could the Euro endure if the quarter-on-quarter GDP falls wanting expectations, however there’s a very sturdy risk that it might contract for a second consecutive quarter, thereby satisfying the definition of a technical recession. This may occasionally then re-ignite the price range dispute Italy had with Brussels that shook monetary markets for weeks. Solely this time, the circumstances can be direr, particularly with the present state of Brexit.

Sellers could maintain the higher hand under the 1.1269 stage. The subsequent attainable help is at 1.1216, the place the pair bounced after a short probing in mid-November. If the info underwhelms, EUR/USD’s downward motion could also be accelerated and will doubtlessly collect ample momentum to breach 1.1216.

EUR/USD TRADING RESOURCES

— Written by Dimitri Zabelin, Jr Forex Analyst for DailyFX.com

To contact Dimitri, use the feedback part under or @ZabelinDimitrion Twitter


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