- EUR/USD remains offered and stays close to 2-month lows.
- The risk aversion mood keeps prevailing among traders on Friday.
- US Durable Goods Orders expanded less than expected in August.
EUR/USD remains under heavy pressure near the area of 2-month lows in the 1.1630/25 band so far on Friday.
EUR/USD risks further decline
EUR/USD is on the way to close the second consecutive week in the negative territory, although this time posting heavy losses and trading back to levels last seen in mid-July near 1.1620.
The renewed buying interest in the greenback on the back of the resumption of the risk aversion in the global markets continue to justify the (still apparent) change of heart among investors in favour of the buck.
In the meantime, European stock indices are bouncing off earlier lows but are still navigating a sea of red. Same panorama is coming from the US fixed income space, where yields of the key 10-year benchmark remain in 4-day lows around 0.65%.
Early in the calendar, the ECB’s M3 Money Supply expanded 9.5% on a year to August and Private Sector Loans expanded at an annualized 3.0% during the same period. In Italy, both Business Confidence and Consumer Confidence improved in September to 92.1 and 103.4, respectively.
In the US, headline Durable Goods Orders and core orders expanded at a monthly 0.4% during August, both prints coming in short of expectations.
What to look for around EUR
EUR/USD recorded fresh 2-month lows near 1.1630 on Thursday. Despite the move, the pair’s outlook still remains constructive and bearish moves are deemed as corrective only. Further out, the positive bias in the euro remains underpinned by auspicious results from domestic fundamentals (which have been in turn supporting further the view of a strong economic recovery after the slump in the activity during the spring), the so far calm US-China trade front and the steady – albeit vigilant- stance from the ECB. The solid position of the EMU’s current account coupled with the favourable positioning of the speculative community also lends support to the shared currency.
EUR/USD levels to watch
At the moment, the pair is retreating 0.31% at 1.1631 and faces immediate support at 1.1625 (monthly low Sep.25) seconded by 1.1495 (monthly high Mar.9) and finally 1.1447 (50% Fibo of the 2017-2018 rally). On the other hand, a break above 1.1709 (38.2% Fibo retracement of the 2017-2018 rally) would target 1.1749 (55-day SMA) en route to 1.1917 (high Sep.10).
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