EUR/USD trades at the lows for the day
After gaining momentum in a break below the 200-hour MA (blue line), sellers haven't looked back and price is continuing to trend downwards towards the 1.1300 handle. Right now, price action is encountering a brief pause as support from the 4 January low @ 1.1346 and the 76.4 retracement level @ 1.1343 is helping to limit losses on the day.
With German data continuing to disappoint and the outlook for the region still being less than ideal, the euro is still unable to find solid reasons to pull off a sustainable rally for the time being. While I'm not a major fan of the dollar's medium-term outlook, the fact that trade talks continue to be left in limbo continues to be a supportive reason for the greenback to stay afloat for now as the outlook for all other currencies over the last week has been rather poor:
EUR - Weak data from Germany, PMI readings continue to show deteriorating conditions
GBP - Brexit uncertainty still weighs, economy grinds to a near standstill
JPY - No suggestions of any risk-off tones yet, markets hopeful on trade talks progress
CAD - Oil prices off the highs, technically a bit exhausted after run lower in USD/CAD
AUD - Change in RBA rate outlook, economic conditions still not improving
NZD - Economic data not convincing as evident by today's labour market report
With price now breaking back below the broken trendline support, we could very well revisit the 1.1300 handle and the August low for EUR/USD. That is where I reckon traders will reassess whether or not price should fall further and hopefully by then there would be more clarity from trade talks to provide markets with more certainty in direction.
