EUR/USD: Euro extends its losses in the morning session


EURUSD Movement

For the 24 hours to 23:00 GMT, the EUR declined 0.50% against the USD and closed at 1.1252.

On the macro front, Germany’s Ifo business climate rose to 86.2 in June, hitting its highest level in four months and compared to a reading of 79.5 in the previous month. Moreover, the Ifo expectations advanced to 91.4 in June, surpassing market forecast for a rise to a level of 87.0 and compared to a level of 80.1 in the earlier month. Meanwhile, the Ifo current assessment climbed to 81.3 in June, undershooting market consensus for a rise to a level of 84.0 and compared to a reading of 78.9 in the prior month.

In the US, the MBA mortgage applications dropped 8.7% in the week ended 19 June 2020, compared to a rise of 8.0% in the previous week. Meanwhile, the housing price index rose 0.2% on a monthly basis in April, compared to a rise of 0.1% in the previous month.

The International Monetary Fund (IMF), in its World Economic Outlook report, downgraded its global growth forecasts for this year and warned that 2020 would witness the worst global economic contraction since the Great Depression of the 1930s. The IMF now estimates a contraction of 4.9% in global gross domestic product (GDP) in 2020, lower than the 3% drop predicted in April.

In the Asian session, at GMT0300, the pair is trading at 1.1246, with the EUR trading 0.05% lower against the USD from yesterday’s close.

The pair is expected to find support at 1.1217, and a fall through could take it to the next support level of 1.1189. The pair is expected to find its first resistance at 1.1300, and a rise through could take it to the next resistance level of 1.1355.

Moving ahead, traders would keep a watch on Germany’s GfK consumer confidence survey for July, slated to release in a few hours. Later in the day, the US durable goods orders for May and annualised gross domestic product for 1Q 2020, along with initial jobless claims, would keep investors on their toes.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

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