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Euro, which had previously regained some of its positions on its pair with the dollar, began to gradually lose them. The European currency was on a financial "diet", losing weight from the current geopolitical tensions. Experts believe that in the near future, euro will sink while dollar will strengthen.
On Wednesday, January 8, euro was tripped up by a weak report on the German industry. According to the document, there was a significant decrease in the volume of orders in the German industry in December 2019. The current situation contributed to the sell-off of the euro, which was under pressure throughout yesterday. The bulls were also unable to protect the support level of 1.1117–1.1118, allowing this line of defense to be broken later.
Nonetheless, on Wednesday, the EUR/USD pair reached the level of 1.1137, however, it could not hold on to this level for a long time.
According to experts, euro's quotes updated the weekly minimum of the EUR/USD pair on Wednesday, but, judging by yesterday's report, the German industry is still far from a sharp subsidence and probing of the bottom. Analysts drew attention to a huge "hole" in the formation of the market of domestic orders. According to the statistics agency (Destatis), the volume of orders in the German industry fell by 1.3% in November 2019, although orders increased by 0.2% in October last year. At the same time, the volume of domestic orders increased by only 1.6%, while the volume of export orders decreased by 3.1%.
Another fuel to the fire of the sagging European currency is the not too good statistics on consumer confidence index in the Eurozone. According to the report, this indicator sank to -8.1 points in December 2019. In general, experts have recorded a decline in consumer confidence in the Euroblock countries. Certain difficulties remain in the Eurozone's industrial confidence index, which fell to -9.3 points in December last year. Experts emphasize that the current situation has a negative impact on the currency.
On the morning of Thursday, January 9, the EUR/USD pair cruised near 1.1111–1.1112. Later on, the tandem began to maneuver, rising and falling suddenly.
The EUR/USD pair managed to go beyond the low range, reaching the level of 1.1116. According to analysts, the situation of the classic tandem is developing in a "bearish" scenario, which will not be easy for traders to reverse. Sellers of risky assets rushed to the support level of 1.1115, and a breakthrough of which can bring the pair down to a minimum of 1.1070. At the moment though, this situation is difficult to implement.
According to experts, the "thinner" euro will not be able to recover quickly, but a long-term downward trend does not threaten it. Moreso, it will be able to overcome the current obstacles. It just requires a lot of effort. The Brexit situation and the slowdown in the Eurozone are playing against the euro, but the European currency has long established itself as a worthy rival to the dollar, competing with it in many economic areas.
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