The European currency continues to extend losses against the greenback, the question is how low can the Euro go and what’s causing this bearish momentum? The Eurozone economy has been in tough place for quite some time, with ultra-loose monetary policy. The Euro was supposed to see some relief in 2020 but that’s been overshadowed by the coronavirus outbreak and a continuing slump in manufacturing. China is a close trading partner with Germany and giant companies like Volkswagen AG were forced to shutdown plants in China due to the outbreak. The pair is also driven down by strong USD, whose economy remains robust and is also experiencing gains due to being a safe haven asset.
This morning we had the release on German and Eurozone GDP. German GDP QoQ for Q4 was reported at a flat 0.0% below 0.1% forecast and Eurozone QoQ for Q4 was released in line with the forecast at 0.1%.
Today we had the release of United States Retail Sales which came in as expected at 0.3%. Industrial Production will follow at 2:15pm GMT.
EUR/USD on a Daily TF dropped as low as 1.08273 and currently trading around 1.08428 and revisiting lows last seen in May of 2017. Technical indicators are bearish, RSI oversold 24.75.
Resistance: R1 1.08580, R2 1.09, R3 1.09425.
Support: S1 1.08, S2 1.07775, S3 1.07.
GBP/USD on a Daily TF is trading around 1.30285, pretty much flat from yesterdays close after a bullish move following the resignation and replacement of Britain’s Chancellor of the Exchequer. Technical indicators are the same, MACD and Parabolic SAR are ready for a reversal, but not yet there. 13 EMA is pointing up.
Resistance: R1 1.31, R2 50% Fibo 1.31693, R3 1.32500
Support: S1 1.29880, S2 1.29500, S3 38.2% Fibo 1.28835 – 1.28432 200EMA.
USD/JPY on a Daily TF is having a hard time breaking above 110.00 resistance. Currently the pair is moving in a flat around 109.855. The price is being supported by bullish 13EMA. Japan Tertiary Industry Index which measures the change in the total value of services purchased by businesses was released at -0.2% MoM, down from 1.4% previously.
Resistance: R1 1.10, R2 110.214, R3 110.680.
Support: S1 109.515, S2 109.270, S3 109 – 108.911 23.6% Fibo.