- EUR/USD remains depressed near the 1.0900 handle.
- Confidence/Sentiment gauges next on tap in Euroland.
- US PCE, Personal Income/Spending also noteworthy later.
The sentiment around the shared currency remains depressed so far this week, taking EUR/USD to the 1.0900 neighbourhood, or fresh 2-year lows.
EUR/USD eyes a break below 1.09
Spot is down for the third consecutive session on Friday, coming under extra downside pressure on the back of the solid performance of the Greenback, which trades at shouting distance from YTD peaks beyond 99.00 the figure when gauged by the US Dollar Index (DXY).
Auspicious headlines from the US-China trade front as of late have lifted yields and sparked a selling pressure in safe havens, pushing uSD/JPY higher and thus lending extra legs to the buck’s rally.
Later in the docket, several confidence/sentiment measures in the euro area are due. Earlier, September’s advanced inflation figures in France see the CPI contracting 0.3% MoM and raising 0.9% from a year earlier.
Across the pond, the Fed’s favourite gauge for inflation – the PCE – is due later along with Personal Income/Spending and the final print of US Consumer Sentiment.
What to look for around EUR
EUR dropped to new 2-year lows in levels just above 1.09 the figure earlier today, as investors’ sentiment remains sour and without any hint of getting any better in the near term at least. Following Monday’s results from PMIs, the economic outlook in the region deteriorated further, with the added possibility that Germany could enter into a technical recession in the third quarter. The unremitting slowdown in the bloc also justifies the ‘looser for longer’ monetary stance by the ECB, collaborating further with the bearish view surrounding the currency. Additionally, potential US tariffs on imports of EU cars remain well on the table, while persistent uncertainty around Brexit and UK politics adds to the gloomy scenario.
EUR/USD levels to watch
At the moment, the pair is down 0.10% at 1.0909 and a breach of 1.0904 (2019 low Sep.3) would target 1.0839 (monthly low May 11 2017) en route to 1.0569 (monthly low Apr.10 2017). On the upside, the next hurdle aligns at 1.1009 (21-day SMA) followed by 1.1109 (monthly high Sep.13) and finally 1.1163 (high Aug.26).
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