Devastating Day for the Euro

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Devastating Day for the Euro

The euro has lost more than 140 points against the U.S. dollar within 24 hours, as the economic indicators released on Thursday were quite terrible. The German retail sales contracted by 0.4% in the past month against the expected growth of 0.5%, while the German consumer climate dropped against its previously recorded figure of 7.1.

Moreover, the French consumer spending contracted by 0.1% in September and the European CPI Flash estimate for this year also dropped to 0.7% from 1.1%. The unemployment rate of the Eurozone remained at its record high level of 12.2% that is being considered as an alarming situation by the investors since there is no such improvement in the labor market for several months.

The Eur/Usd is currently trading at 1.3554 and has entered the bearish channel since it is way down the critical resistance level at 1.3665, but a bullish correction might be seen where the breaking of 1.3569 could shift the pair to 1.3618 that is its pivot point for today. And if it moves below 1.3522 then its next targets would be 1.3497 and 1.3473.

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Pound relying on Fundamentals

The British pound is desperately looking forward to some good, healthy fundamentals that could buttress it in moving up because technically the pair has been bearish for the past 4 days and on Thursday the pair gained some confidence as the Housing Price Index of the U.K. economy grew by 1.0% in the past month hence giving positive economic activity in the housing market.

There is very strong psychological support at 1.6001 which if broken, could drag the pair down to its 2 weeks low at 1.5978 region, but a move above its today’s pivot point at 1.6035 could allow the bulls to take the pair to 1.6048 and 1.6063.

The Manufacturing PMI data is set to be released today in the European session that could certainly create volatility in the pair, plus the ISM Manufacturing PMI of the U.S. economy is due today in the U.S. session, after which good movement in the market could be seen and could be uni-directional.