The Euro started last week with a positive note. On September 1, the EUR/USD reached to 1.2010 -level against the greenback for the first time since May 2018 but later the currency pair retreated from the top and closed below 1.1850 on Friday. The currency pair has come under pressure following comments from ECB Chief Economist Philip Lane and weaker-than-expected economic data including Eurozone retail sales and the German factory orders.
“If there are forces moving the euro-dollar rate around, that feeds into our global and European forecasts and that in turn does feed into our monetary policy setting.” Philip Lane, ECB chief economist said.
During the last week, the dollar rebounded from more than 2 -year lows and ended in positive territory driven by positive economic data includes strong jobless claims figures, new factory orders, and manufacturing data. On Friday, the US NFP report showed the economy added 1.371 million jobs in August while the unemployment rate dropped to 8.4%, beating market forecasts of 9.8%.
Fundamental and Technical outlook:
In this week, investors have become increasingly concerned about the Eurozone economic health going forward. On the other hand, the traders and investors will also pay attention to the important events for EURO this week, Eurozone GDP numbers and ECB monetary policy meeting on Thursday. The market participants expecting no major changes in the current policy stance but looking for the clues on when more stimulus will be added through the emergency purchase program. While on Monday will be a quiet day in terms of data due to the US markets are closed.
Technically the overall momentum remained bearish for the EUR/USD after the bulls failed to extend the rally. At the time of writing the currency pair hovers near the 1.1830. In the short term if the price breaks below 1.1810 which would open doors towards to last week low of 1.1780 and below that 1.1750/1.1710 is next. On the upper side, the first immediate resistance can be found at 1.1880 and then 1.1915/40.
In the long term, watch for trendline breakout at 1.1770 and 1.2030, that will give a larger confirmation of direction in the long term.