- EUR/USD prints another session low but still holds above 1.1100.
- US dollar rises further against majors during the American session.
The EUR/USD pair is falling for the third-day in-a-row, and it could post the lowest daily close in two years. On Wednesday the Euro has constantly been falling against the US dollar, hitting fresh lows every session. Recently bottomed at 1.1123 and it trades at 1.1130, consolidating losses.
The negative tone of the last hours took place amid a stronger US Dollar across the board. The DXY rose to 98.21 and trades at 98.18, about to post the strongest close in a month. In Wall Street, equity prices trimmed losses over the last hours but main indexes are deep in red. The DOW JONES is down 1.07% and the NASDAQ losses 0.68 %. US yields continue to move lower and German bonds are also at multi-year lows.
Regarding data, tomorrow in the US, the second reading of Q1 GDP is due. In the Eurozone, the critical report today was that German unemployment unexpectedly rose for the first time in almost two years.
EUR/USD Outlook
The short-term trend continues to point lower. If the Euro remains unable to correct higher a test of 1.1100/10 seems likely. A break lower could trigger more volatility. The next strong support might lie at 1.1050/60. Despite trading near multi-year lows, EUR/USD price action remains limited. Over the last 30 days, it moved in a 150-pip range.
“The market is looking for more than promises from the ECB before selling the euro from an already short position, despite weak PMIs and deteriorating inflation expectations. The Fed is not much easier to read but the pricing of Fed cuts has lent some support to EUR/USD. We forecast EUR/USD at 1.12 in 1M and 1.13 in 3M as we look for a status quo in the current weak economic environment. In 6M and 12M, we forecast 1.15 and 1.17, as we expect a China-led recovery along with a US-China trade deal to lend support to EUR/USD“, wrote analysts at Danske Bank.
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