Euro loses ground against US dollar as EURUSD drops amid economic concerns

EURUSD Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.27%	-28.5 Pips
Week to-date	0.28%	29.1 Pips
February	1.2%	124.8 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD GDP annual rate
Fri 01:00 PM EUR CPI Inflation Rate (12-mth)
Fri 01:00 PM EUR Harmonised Index of Consumer Prices (HICP) (12-mth)
Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

The United States experienced a downward trend in January regarding new-home sales, which plummeted by 10.5% from a previous revised increase of 8.1%. This reflects a substantial decline in the demand for new homes, possibly due to rising interest rates or unfavorable economic conditions. Additionally, the U.S. House Price Index remained stable at 0.4% in December, showing that the prices for houses did not witness any significant change in that period, indicating a potential stabilization in housing market values.

In Germany, consumer confidence appears to be waning as the GfK Consumer Confidence Survey for March fell to -24.7 points from a revised figure of -22.6 in February. This decline suggests that consumers are becoming more pessimistic about the economy’s short-term outlook. Furthermore, Germany’s Gross Domestic Product (GDP) indicated stagnation in growth, with the GDP remaining unchanged at -0.4% on a year-to-date basis and -0.2% for both the quarterly and yearly reports in Q4 as compared to Q3. These figures suggest that Germany is struggling to gain any significant economic momentum.

The decline in EURUSD of 0.27% to 1.04836 indicates that the euro is losing ground against the U.S. dollar. The worsening consumer confidence in Germany and stagnant GDP figures suggest weaker economic prospects for Germany, which could influence investors to continue favoring the U.S. dollar over the euro. As the EURUSD pair is in consolidation, investors might be waiting for upcoming economic data, such as the German CPI inflation rate and U.S. GDP figures, to provide direction. Should U.S. economic data show strength and European data depict ongoing struggles, there could be further pressure on EURUSD, leading to potential depreciation of the euro against the dollar. Conversely, if European economic indicators show improvement, there may be opportunities for the euro to recover some of its recent losses against the dollar.

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What can we expect from EURUSD today?

EURUSD on Wednesday dropped -0.27% to 1.04836. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for EURUSD looks mixed as the pair is likely to consolidate above 1.04626 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 1.05289 or trades above daily pivot 1.04957. Break above could target R1 at 1.05168. While to the downside, we are looking at 1.04626 (S1) and daily low of 1.04747 as support levels. EURUSD need to break on either side to indicate a short-term bias. A close below 1.04747 would indicate selling pressure.

For the week to-date, take note that EURUSD is mixed as compared to the prior week.

Key levels to watch out:

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