Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

EUR/USD Short In Progress, U.S. Economy Enters Recession Phase

Published 04/02/2019, 11:40 AM
Updated 07/09/2023, 06:31 AM

MyFXspot.com Trade Ideas

  • EUR/USD: short at 1.1240, take profit at 1.1105, stop-loss 1.1305
  • AUD/USD: short at 0.7120, take profit at 0.7010, stop-loss 0.7175
  • NZD/USD: short at 0.6800, take profit at 0.6660, stop-loss 0.6870

Market Overview

The USD continues its rise against the EUR, in line with our expectations, , as investors evaluated international growth prospects with the U.S. and European central banks unlikely to raise interest rates soon.

Factories in the euro zone had their worst month for almost six years in March and forward looking indicators pointed to gloomy times ahead, a survey found, grim reading for European Central Bank policymakers.

Manufacturing PMI declined for an eighth month, coming in at 47.5 from February's 49.3, just below a flash estimate and its lowest reading since April 2013.

An index measuring output change, which feeds into a composite PMI due on Wednesday - seen as a good gauge of economic health - sank to 47.2 from 49.4, its lowest since April 2013 and the second straight month it has come in below the 50 level dividing growth from contraction.

The disappointing results come after the ECB changed its outlook last month. It pushed back the timing of an interest rate rise until 2020 at the earliest and said it would offer banks a new round of cheap loans to help revive the economy.

Data on Tuesday, however, showed that new orders for key U.S.-made capital goods unexpectedly fell in February and shipments were unchanged, while data for January was revised slightly higher.

Our economic cycle clock suggest the U.S. economy entered the recession phase in recent months.
Economic Cycle Clock

EUR/USD has registered multiple daily closes below the 1.1241 Fibonacci level, a 76.4% retrace of the 1.1177 to 1.1448 rise. That has made the chance of a breakdown below the recent 1.1177 2019 low more likely. We remain short.

Economic research and trade ideas by MyFXspot.com

Latest comments

Day late and alot of dollars short
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.