The euro is continuing to soften and drifts back toward Thursday’s low. That’s why analysts are projecting that the near-term trading range will find a home between 1.1480 and 1.1580. Just over the 1.15 barrier immediate support is expected, illustrating traders’ risk-averse mindset in today’s economy.
This week’s eurozone services sector data yielded a thrilling upside surprise. It came in at 53.1, above the forecast of 52.8. This figure does mark a small drop from last month’s reading of 53. From these readings, it’s clear that the all-important services sector is more than just a safe haven for the eurozone economy. It has stayed pretty darn optimistic, lodged well above the neutral 50 threshold.
Nonetheless, the good news largely ends here, with analysts flagging cracks beneath the surface even as the services sector continues to outperform expectations. Shaun Osborne and Eric Theoret wrote eloquently on this very situation, saying,
“We are cautiously neutral while acknowledging the risk of further weakness.”
The euro’s flip floppin’ is being complicated by some nostalgic supports. The early November low should provide added support in the 1.14’s mid to upper range. The early August low is now stuck near 1.14. These price points will be important for traders to watch, as they continue to work through the volatility caused by …
European Central Bank (ECB) President Christine Lagarde has made clear that the eurozone’s growth model is under serious threat. She remarked that,
“Europe’s export-driven growth model was ‘based on a disappearing world’ and that governments needed to act with a greater sense of urgency as they seek to deliver growth.”
All of this underscores the urgent need for strategic, targeted action to maintain and strengthen economic security in the face of an increasingly competitive global landscape.
Market participants are still anxiously trying to ascertain the implications of these tectonic shifts. The euro’s future will mainly rest on the next set of economic indicators and the policy choices of Europe’s leaders. The interplay between domestic economic performance and external pressures will be a determining factor in shaping the currency’s future movements.