EURUSD Revisits 2-year Lows for Third Session in a Row
EURUSD gives up 0.28% at 1.0910, testing the two-year lows for third day in a row as ECB stays on the dovish side. Dismal macro figures from EU also weigh on the common currency while US economy looks strong. Earlier Germany Unemployment Rate s.a. matched forecasts of 5% for September, the Unemployment Change came in at -10K, below expectations of 4K. European Monetary Union Unemployment Rate came in at 7.4% below forecasts of 7.5% in August. Spain Gross Domestic Product (quarter over quarter) came in at 0.4% below forecasts of 0.5% in second-quarter 2019.
The ECB, in its last policy meeting, cut the Deposit Rates by 10 bp to -0.50% and unveiled another round of debt purchases.
On the technical side EURUSD rejected at the upper bound of the descending channel in mid-September which paved the way for a move to the lower band of the trend channel. The momentum is bearish as EURUSD trades below all major moving averages. The common currency has trapped in the descending channel since June, and now the pressure from dismal macro data continues to pressure the pair to fresh two year lows. On the downside important support now stands at 1.090 daily and 2-year lows, and the 1.09 round figure, a break below will encourage more bears to join the action and drive the price down to 1.0838 the low from May 2017. Below this level, the next support comes in at the lows seen on April 2017 at 1.0569. This is the next target that could be attained on a convincing downside break of the 1.0838 support line.
On the flipside, immediate resistance stands at 1.0947 today’s high, a break above can lead prices up to 1.0958 Friday’s high while more supply will be met at the upper bound of the descending channel, at 1.1040. Short positions can sit comfortably as long as the pair trades below the psychological 1.10 mark.