EURUSD Price Charts and Analysis:
- ZEW data – any pick-up will be from a very low level.
- US dollar strength continues unabated.
EURUSD – Rallies will Find Resistance Difficult to Overcome
The latest indicator of the state of the Euro-Zone economy will be released later this morning and may bring a brief respite to the Euro’s ongoing weakness. The ZEW economic sentiment readings for the Euro-Zone and Germany may nudge higher but from a very low base. Last month’s German reading was the lowest since 2011 at -44.1. This compared to an average reading of 21.6 between 1991 and 2019 and a record low of -63.9 made in July 2008.
German ZEW Economic Sentiment Index – 2009 – 2019
On Wednesday the US Federal Reserve are expected to cut interest rates by 25 basis points to 1.75% to 2.0%, but market indicators have pared back expectations marginally. This can also be seen in the US Treasury Market where the yield on the 10-year UST has risen by over 35 basis points in the last two weeks, suggesting demand for the greenback remains strong.
EURUSD continues to move lower and looks to re-test the recent double-low around 1.0926. The pair trade below all three moving averages while the CCI indicator points lower but is not yet in oversold territory. To the upside, resistance remains around 1.1107 ahead of 1.1176.
EURSUD Price Daily Chart (January – September 17, 2019)
The IG Client Sentiment Indicator shows retail traders are 67.4% net-long of EURUSD, a bearish contrarian bias. However daily and weekly changes suggest give us a stronger bearish contrarian trading bias for EURUSD.