Forex news on Friday sent the euro deep into the bears’ territory. EURUSD initially rallied to an intraday high of 1.1086 after opening at 1.1057. However, the currency pair tumbled to 1.1013 before ending Friday’s trading with a 39-pip loss at 1.1018.
Forex News On Economic Data Disappoint
First, there were the PMI reports. Data from France and Germany were mixed. French and German manufacturing PMIs were better than expected at 51.6 and 43.8 versus forecasts at 50.9 and 42.9, respectively. On the other hand, services PMIs of the two countries failed to impress at 52.9 versus 53.0 for France and 51.3 versus 52.0 for Germany.
The performance of the two industries were also reflected in the region-wide report. The euro zone services PMI missed the 52.4 forecast when it came in at 51.5. Meanwhile, the manufacturing PMI was better than the expected reading of 46.4 at 46.6.
Lagarde Calls For More Stimulus
Second, Christine Lagarde who is the new European Central Bank (ECB) President called for more aggressive measures to support the euro zone economy. In her speech, she highlighted the risks of the ongoing trade war and that countries will need to implement fiscal stimulus. This means that she is urging governments to consider lowering taxes and increasing government spending.
The only economic data scheduled for the euro zone is the German Ifo Business Climate report which is scheduled at 9:00 am GMT. A better-than-expected reading could help EURUSD hang on to support at the rising trend line (connecting the lows from October 1, November 14, and November 25).
On the other hand, disappointing figures could push the currency pair to test support at its November 14 lows at 1.0988.Download our latest quarterly market outlookfor our longer-term trade ideas.
Do you enjoy reading our updates? Become a member today and access all restricted content. It is free to join.