EUR/USD challenges a break of the 100-hour moving average
The Reuters report earlier highlights how fragile the euro can be to news related to economic data/growth outlook in the current market environment. The only good news I can think of in relation to this is that there are some green shoots in the Eurozone economy still and that's providing some support for the euro until they also start to turn for the worse.
EUR/USD slipped from 1.1305 to a low of 1.1280 on the headlines earlier and is continuing to do battle around 1.1290, where the 100-hour MA (red line) lies.
Fall below that and the near-term bias will turn from being more bullish to more neutral. Over the past two weeks, there hasn't been much to really shake things up in the euro (the ECB meeting was more or less a repeat of the March meeting) but this is certainly a new development to add to the picture.
This could suggest potential forecast downgrades moving forward and will cast doubt on future economic data as well. The reaction in the euro so far suggests that markets have reason to be pessimistic but confirmation of any doubts and negativity will rest in the hands of future economic data releases.
That said, any sustainable rallies in the euro will also prove to be elusive as long as policymakers are also expressing similar doubts to that of market participants. I reckon the single currency will only be able to find a significant extension higher only if the growth outlook clears and that may not come until 2H 2019.
