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EUR / USD drops below 1.1200

EUR / USD drops below 1.1200

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Erik Holm - Head of media

The euro lost some of the points scored yesterday, and EUR / USD fell back to daily lows around 1.1190 / 80.

On Tuesday, the pair is trading lower due to the growth of the US dollar and risk aversion on the markets. Investors continue to take a wait-and-see stance due to the lack of news from the US-China “trade front” and the situation in Hong Kong, where mass protests continue for several weeks.

Today, German published the final CPI, and the data completely coincided with the preliminary assessment. Next, we are waiting for the ZEW Institute indexes in Germany and the Eurozone. During the North American session, the United States will publish inflation data and a weekly report by the American Institute of API oil reserves.

The reluctance of the euro to decline in an environment of risk aversion may be due to the already begun “repatriation” of assets, as well as the fact that funding currency. Another source of uncertainty was the political situation in Italy. The growth of the single European currency will remain limited as the ECB prepares to introduce new policy easing measures, potentially including a cut in interest rates, the resumption of QE, as well as the introduction of a multi-level system of deposit rates in September. The main factor of the pessimistic mood of the ECB and the weakening euro are the worsening forecast for the Eurozone economy and the lack of inflation in the region.

Support takes place at 1.1161 (minimum of August 12), 1.1101 (minimum of July 25) and 1.1026 (minimum of August 1 and 2019). Resistance is noted at 1.1232 (55-day MA), 1.1282 (high on July 9) and 1.1292 (200-day SMA).