EUR/USD threatens further downside after Eurozone growth misses estimates


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EUR/USD falls to a low of 1.1354 on the session now


ForexLive

Although the sluggish Q3 growth is very much expected, the fact that it confirms the need for a reassessment of Eurozone growth conditions is certainly something that traders will slowly price in more over time. It’s no knee-jerk sharp reaction to the data by any means so far but this is something that will slowly build into euro sentiment as more hard data starts to support the case of a further slowdown.
It all started in Q1 when the ECB brushed off the slow growth to ‘extraordinary’ conditions and then it lasted to Q2 where they said it should be temporary. But now that it has started to creep into Q3 and possibly Q4, the outlook isn’t all too great for the Eurozone economy. And that will have traders slowly pricing out further a potential move by the ECB to normalise policy by the end of 2019.
For EUR/USD price action at the current time though, we’re seeing a move lower that threatens to break yesterday’s low of 1.1361 with some support seen from Thursday’s low of 1.1356 as well. Hold breaks below those levels and we will be on the cards to test Friday’s low of 1.1336.
The euro may still be holding onto gains against the yen and the pound so far today, but make no doubt about it, the continuation of sluggish growth will eventually take its toll and weigh down the single currency further as currently this is beginning to threaten the ECB’s plans of normalising monetary policy next year.
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