Euro, Eurozone growth & political gridlock trending points
- Political problems in eurozone alongside a much-softer financial growth had been trapping the euro between 1.1220-1.1570 since mid-October.
- Stagnant growth in eurozone could add another repercussion into the political gridlock
- Despite the daedal distresses over eurozone economy and political gridlocks, the euro had been gaining in the last couple of days, with further gains seem to be upcoming ahead of an expected dovish FOMC minutes.
Euro cautiously ahead, overhauling hazards amid a mixed outlook
For nearly past couple of weeks, the EUR/USD pair had been trading between 1.1330 and 1.1235, its three-month low. However, on last Friday, February 15th, euro started to lift from three-month low and at this moment, euro has broken its initial resistance level at 1.1359, on a 30-day moving average and had been eyeing to re-test 1.14 region in a near-term outlook.
EUR/USD price chart
Following an expected downbeat FOMC minutes scheduled to be held later today, the euro would likely to add further gain and analysts are expecting it breach 1.14 level in a near-term outlook, despite political gridlocks and disappointing data, indicating a growing recession risk.
Meanwhile, the EUR/USD pair is expected be highly volatile after the FOMC minutes and investors should brace for a 50-80 pips sideway momentum following the Fed talks.
Fed would highly unlikely to post a rate hike in a near-term, following a nine-year low retail sales data revealed last week, indicating a steep slowdown.
On the flipside, the euro gains would likely to be curbed by a series of disappointing data from every corner of eurozone, including a narrowly averted recession of Germany last week, while Italy is already in a technical recession and France and Spain are shortly behind.
While this report is being prepared, the 20thof February, GMT. 17.00, the EUR was trading 0.19 percent higher to 1.1364 against American dollar, after posting three consecutive days of gains.
Next technical resistance level for euro resides at a critical sentimental level of 1.1410, and if it is broken, the euro greenback could test 1.1450 level in a near-term outlook.
Over the economic front, the eurozone consumer confidence data would highly support a euro greenback, as euro-zone consumer confidence for February posted a -7.4 reading from previous -7.9, beating the estimated forecast level at -7.7.
Despite a mixed euro outlook, the erudite euro bull-run could have been curbed by both eurozone’s economic and political woes.
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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]