The euro continues to lose ground this week. Currently, EUR/USD is trading at 1.1927, down 0.38% on the day.
Will shaky euro fall below 1.19?
The euro is in a slump this week, as the currency has posted two straight losing days and is again in negative territory on Friday. Earlier in the day, the pair touched a low of 1.1914, its lowest level since November 2020. The euro’s fortunes have gone south in a hurry; it was just over a week ago that the currency was basking above the 1.22 level.
Consumer spending in the eurozone was dismal in January. This was reflected in sharp declines in retail sales across the bloc. Retail Sales came in at -4.5% in Germany, -5.9% in the eurozone and -3.0% in Italy, with all the readings well below the forecasts. At the same time, it is not a huge surprise that the eurozone consumer has been severely restricted from being able to go out and spend money due to the lockdowns across the eurozone. As well, eurozone consumers remain deeply pessimistic about economic conditions. Still, there was also some positive news in the January data. The eurozone unemployment rate dropped to 8.1%, down from 8.3% and a five-month low. As well, German Factory Orders rebounded with a gain of 1.4%, after a read of -1.9% beforehand.
Later in the day, US employment data will be in the spotlight (15:30 GMT). The highlight is Nonfarm Payrolls, which should be treated as a market-mover. There are concerns that the NFP release could mirror a weak ADP employment report earlier in the week, which showed that the economy created only 117 thousand jobs, well below the forecast of 203 thousand. The street consensus for the NFP release stands at 197 thousand, and a reading which misses expectations could sour investors and send the dollar to lower levels. As well, wage growth is expected to remain at a weak 0.2%, while the unemployment rate is projected to stay at 6.3%.
- EUR/USD faces resistance at 1.2190. Above, there is resistance at 1.2307.
- On the downside, the pair is testing support at 1.1945. If the pair continues to move lower, the downturn could potentially extend to the round number of 1.1800.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.