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- EUR/USD Dropped to 1.08, on Target
EUR/USD Dropped to 1.08, on Target
Fundamental factors allowed EUR/USD to test the next lower technical support level in the vicinity of the 1.08 figure. These levels were last seen on June 15. The actual move already exceeded my forecast from August 8, when I expected the single currency to go to try its 1.0910-1.0940 support on extra signs of slowdown in Germany, with a further chance for more weakness in case of a favourable combination of economic indicators in the U.S. and Europe. That's exactly what happened. Yet, some volatility on currency markets suggests at least a partial profit taking from opened sell positions. Uncertainty is growing as it becomes difficult to predict the crowd's response to the speech of Jerome Powell, as the head of the Federal Reserve would be ready with his monetary policy comments at Jackson Hole on Friday. The European Central Bank's officials, who are invited to visit the event, can do their bit as well. Cutting some market positions appears to be a reasonable choice and proper treatment for profit/risks ratios. Getting back to what helped the Euro to go further down, European services index of purchasing managers suddenly dropped from 50.9 to 48.3, which was the first value below the 50.0 barrier, nominally dividing growth from recession, after the Christmas quarter. Besides, consumer confidence in the Euro area plunged to -16.0. Therefore, official estimates of householders' morale lost another 0.9 points from -15.1 in July, though consensus forecast was complying with a possible improvement of the sentiment to 14.3. Important data, but it may still have a temporary impact on the market sentiment.
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