- ECB survey shows lower growth expectations for 2019 and 2020.
- ECB’s Villeroy says determined to stay accommodative for as long as necessary.
- US Dollar Index recovers above 97 on upbeat data.
The EUR/USD pair came under a renewed selling pressure in the early NA session and dropped to a fresh daily low around 1.1250 before finding support and staging a recovery in the last hour. As of writing, the pair was trading at 1.1270, where it was virtually unchanged on the daily chart.
Earlier today, the ECB’s survey of professional forecasters showed that the real GDP growth expectation for 2019 dropped to 1.2% from 1.5% previously and to 1.4% from 1.5% for 2020 to weigh on the euro. Additionally, ECB Governing Council member and Bank of France Head Villeroy acknowledged that the eurozone economy was slowing down and that they were determined to be “as accommodative as needed for as long as necessary.”
On the other hand, following yesterday’s modest drop, the US Dollar Index, which tracks the greenback against a basket of six major currencies, rose above the 97 mark supported by today’s upbeat data releases from the United States and forced the pair to push lower.
The weekly jobless claims in the week ending April 5 dropped to 198K for the first time since 1969 in the U.S. and the annual Producer Price Index came in at 2.2% in March to surpass the market forecast of 1.9%: However, with the DXY retreating from its session highs in the last hour, the pair didn’t have a difficult time retracing its fall.
Technical outlook by FXStreet Chief Analyst Valeria Bednarik
The EUR/USD pair trades at daily lows around 1.1255 heading into Wall Street’s opening, gaining bearish potential according to readings in the 4 hours chart, as the pair is now below all of its moving averages, while technical indicators turned south, the Momentum entering negative ground and the RSI pressuring its 50 level. The immediate support is the 1.1245 level, the 23.% retracement of the latest daily decline, an area that contained advances throughout most March. Nevertheless, bears will be stronger once the par losses the 1.1200 mark.
Support levels: 1.1245 1.1200 1.1175
Resistance levels: 1.1285 1.1315 1.1350
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