Euro Price Outlook: EUR/USD Hits Multi-Year Low as ZEW Sentiment Data Plummets
EUR/USD Price, News and Analysis:
- EUR/USD has just hit lows last seen in April 2017.
- ‘Worse-than-expected development of the German economy’ – ZEW.
EUR/USD Nears a Fresh Three-Year Low
The latest ZEW data points to increased economic uncertainty in Germany, citing the coronavirus and the negative impact it is having on export expectations. The data fell sharply, missing expectations with ease, and confirm that January’s sharp pick-up was an aberration.
“The feared negative effects of the Coronavirus epidemic in China on world trade have been causing a considerable decline of the ZEW Indicator of Economic Sentiment for Germany. Expectations regarding the development of the export-intensive sectors of the economy have dropped particularly sharply. Besides, the end of 2019 and the beginning of 2020 saw a worse-than-expected development of the German economy. Both the downward revision of the assessment of the economic situation and the downturn in expectations show clearly that economic development is rather fragile at the moment,” said ZEW President Professor Achim Wambach.
For all market moving data and events please the DailyFX calendar
EUR/USD continues to slide lower and has traded at its lowest level since April 2017 with little in the way of strong support around current levels. On the weekly chart there is a gap between 1.0777 and 1.0821 – made in mid-to-late April 2017 – that looks likely to be filled. Below here, a higher low at 1.05699 guards a double-bottom just under 1.0500. If the bearish sentiment continues, these support levels may come threat, although the move is likely to be made over the medium-term. The CCI indicator shows the pair extremely oversold and this may act as a break against further sharp sell-offs.
EUR/USDWeekly Price Chart (October 2015 – February 18, 2020)
Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.
What is your view on EURUSD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.