After some consolidation, EURUSD broke to the downside on Thursday and extended losses to fresh two-year lows just above the 1.09 handle. Despite some intraday bounce, the euro remains under the selling pressure and could suffer further losses amid a resilient dollar across the board.
Apart from a resilient greenback, the downside pressure came from another disappointing report in Germany. Import price index came in at -2.7% year over year, below forecasts of -2.6% in August. The dismal figures increase the odds of a recession in the Eurozone’s largest economy and further dent the appeal of the common currency.
Technically, a break below the 1.0925 points to the risk of accelerating the downside, while a recovery above the 1.10 handle will help to somehow improve the near-term technical picture. However, building evidence of economic weakness in the region is weighing more on the currency, so the downside pressure will likely persist down the road as the US economy still looks better and may not need a more aggressive stimulus from the Federal Reserve.
Apart from a resilient greenback, the downside pressure came from another disappointing report in Germany. Import price index came in at -2.7% year over year, below forecasts of -2.6% in August. The dismal figures increase the odds of a recession in the Eurozone’s largest economy and further dent the appeal of the common currency.
Technically, a break below the 1.0925 points to the risk of accelerating the downside, while a recovery above the 1.10 handle will help to somehow improve the near-term technical picture. However, building evidence of economic weakness in the region is weighing more on the currency, so the downside pressure will likely persist down the road as the US economy still looks better and may not need a more aggressive stimulus from the Federal Reserve.