EURUSD: Euro Pressured by New Multi-Year Low in Sentix Indicator
Today, the Euro is turning lower vs. the US Dollar (EURUSD). The move started at 8 am London time, and the weak Eurozone Sentix Investor Confidence index at 9:30 am is not helping Euro bulls. The index declined to -16.8, and more than the -13 anticipated by economists, and the -11.1 in September.
The Sentix indicator does not tend to get much attention, but it is one of the first estimates of the mood in the Euro area and is ahead of the more followed ZEW, IFO, and Markit PMI indicators.
The drop in the Sentix indicator was a fresh multi-year low, and suggest that the Euro area economy is deteriorating further.
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[vc_single_image image=”14654″ img_size=”medium” alignment=”center” style=”vc_box_rounded” onclick=”custom_link” img_link_target=”_blank” link=”https://www.investingcube.com/q4-global-market-outlook-eurusd-gold-crude-oil-bitcoin-sp-500/”]Technically, the EURUSD pair remains in an upward trend as long as the price trades above the October 3 low of 1.0938. The EURUSD should drift higher and might reach the next resistance level, the September 24 high of 1.1023, followed by the 1.1051 level, which is the target of an inverse head and shoulders formed between September 25 to October 3.
However, on the EURUSD trading below the October 3 low, the bullish trend would fail and align itself with the long-term bearish trend, and the price might be able to reach the 2019 low of 1.0876.
This evening at 18:00 London time, Fed Chair Powell will speak and might shed some more light on what the outlook is for US interest rates. Last week, was an especially disappointing week with both the ISM Manufacturing and Services printing lower than expected and suggesting the US economy is cooling further. The slowdown in the economy is unwelcome, and is happening ahead of a potential increase in US tariffs on 250 billion Chinese imports on October 12, which should slow the pace of economic growth further.