Euro loses its allure

FX:EURUSD   Euro / U.S. Dollar
The euro failed to receive a respite after a recent sell-off and remains under pressure on Friday. EURUSD has settled around 1.1340, trading with a mild bearish bias. In the weekly charts, the pair is within striking distance from the 200-week MA. This region capped the selling pressure on several occasions over the last few months, so a closure below this moving average will worsen the technical picture significantly.

The sentiment around the common currency continues to deteriorate. In its fresh forecasts, the the European Commission revised lower its prospects of economic growth for 2019 in Germany and the region in general to 1.1% from 1.8% and to 1.3% from 1.9%, respectively. Moreover, the Commission now expects inflation at 1.4% versus the previous estimate of 1.8%.

Against this backdrop and the latest disappointing macroeconomic data from the euro area, investors push back the ECB rate hike expectations further. If the central bank itself starts signaling a possible shift in its forward guidance, the prospects of shelving plans to hike rates in 2019 will hurt the euro quite dramatically.

Technically, EURUSD needs to stay above the 200-week MA that is standing on the way to the 1.290 region, where January 24 lows lie. Should the 1.13 support withstand the pressure from the dollar bulls, the common currency could make some recovery attempts. However, the fundamental picture in the region coupled with trade war worries will prevent the high-yielding currency from a decent rebound in the short term.


I never saw any 'allure' to the EURO but off course it's fine if other people saw 'allure'. The 'thing' is doomed to fail for numerous socio-political and macroeconomic reasons. Some say that the EURO has been engineered to fail for nefarious purposes (which I cannot go into here). At the moment EURUSD 1D is hanging on for dear life on a fragile level of support. If this breaks, all hell could break loose.

This does not mean that I predict anything or that I hope or wish for EURUSD to fall. Why? Cuz my methodology does not rely on emotions or predictions. I'm equally happy if EURUSD rockets north (for whatever reason).
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