The world’s most popular currency pair starts October with consolidating within the scope of the 1.2570-1.2634 price range. The current trading week started from a move within the 1.2663-1.2714 range. The currency pair started moving to the bottom of the range, thereby narrowing it a bit. Later on, during yesterday’s European trading session, the currency pair went on declining and finally set a new 2-year low at 1.2570.
The decline was backed by weak economic figures coming from the Eurozone. Yesterday, on September 30th, the Eurozone published another inflation report, which signaled another inflation slowdown. Consumer prices increased only by 0.3% in September, which is the weakest gain since October 2009. At the same time, the rate of unemployment is still rather high – 11,5%.
Judging by the fundamentals, we can see that the Eurozone economy is slowing down, the lending is weak, the rate of unemployment is high and stable, which is definitely pressing the currency of the Eurozone, thereby pushing the SU Dollar to new highs, especially as financial markets are waiting for the ECB to add to the current stimuli. More currency strategists anticipate a drop down to 1,10 in 2015.
Earlier today, Germany revealed poor employment figures, thereby indicating higher unemployment in the Eurozone’s biggest and strongest economy. The rate of unemployment in Germany is 6,7% while the same rate in the entire Eurozone is 11,5%.
EURUSD
According to the Option Trading Department of Masterforex-V Academy, one of the leading experts in financial markets on the web, the US Dollar is likely to continue its way up to new highs against other majors. Still, the pace of growth may slow down a bit. While the Euro is losing value, the European export may boost.
This week will also bring us the results of the ECB meeting and new Non-Farm Payrolls. These events may cause higher volatility in financial markets, including Forex. Depending on the data, the rally may be continued or suspended.
The H1 chart of EURUSD is still indicating a downtrend. It has been going down since 1.2994, Masterforex-V Academy reports. The current downtrend is most likely to continue its way down to new lows, especially as the technical picture is backed by poor fundamentals from Germany and the Eurozone. The key levels are shown in the graph below:
