EUR/USD Closes Under Significant Level 1.10 — 2% Weekly Loss

EUR/USD closed on Friday at 1.0964, down about 2% on a weekly basis from 1.1196 at beginning of the week. There has been a downside pressure all week and a strong ZEW Economic Sentiment Index of 12.3 on Tuesday, with a 3-month continuous improvement, did not have any significant impact or short-term rally. It is important to note that a higher ZEW Economic sentiment shows positive expectations for the eurozone economy.

On Friday, important news such as US advance retail sales for the month of September, which came in line with expectations and forecast of 0.6% increase on a monthly basis, and a disappointing University of Michigan Confidence survey for the month of October, which came at 87.9 versus 91.8 forecast, did not provide any rally for the pair, especially after news for the sentiment index were released at 14:00 GMT.

What is interesting for the EUR/USD pair are the very important fundamental news coming next week as on Tuesday, October 18, we have the US Consumer Price Index for the month of September and on Thursday, October 20, the much anticipated European Central Bank rate decision. Although the expectations are for ECB to leave main interest rate unchanged again, the traders will evaluate any important comments that may set an important continuation or reversal trend as the EUR/USD pair has closed below significant psychological level of 1.10, and high volatility trading for the pair is very likely.

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