EUR/USD finally broke out of range, and it is to the downside: the pair is now trading at 1.2822, falling below the previous lows of 1.2842.
The move came on top of no particular fresh news, but the euro certainly has reasons to fall. Here are 4 reasons and the next lines:
EUR/USD is at the lowest levels since the beginning of April. Support is found at 1.2805, which was the bottom of the wide 1.2805 – 1.3170 range.
Further support is at 1.2750, which is minor. A more serious line of support appears at 1.2624, which was the January 2012 low.
Update: Better than expected consumer confidence in the US sends EUR/USD below this line, down to 1.2796, but recovers very quickly.
Reasons for the euro to fall:
- Talk that ECB is checking negative rates: According to re-run of a report already seen in the markets, the ECB is checking with banks about the possibility of introducing a negative deposit rate. This weighed on the euro earlier, but didn’t push it to new lows. The break happened now.
- German ECB member expressing worries about Germany: Asumussen warned that Germany could be the sick man of Europe once again, if it doesn’t make reforms.
- Lower euro talk: VP of European Commission saying that the ECB should manage the euro lower. He said it yesterday, and it triggered a limited market response.
- Weak GDP numbers in the euro-zone: Germany grew by only 0.1% and the euro-zone is already in the third quarter of a recession, with Q1 contraction standing at 0.2%, worse than expected.
Live chart of EUR/USD:
Posts
0 comments :
Post a Comment