EUR/USD: Support at 1.0980 to be lost – TDS

Analysts at TD Securities predict the EUR/USD pair is set to lose the support level at 1.0980 following signs of deterioration in Germany.

Key quotes

“The region's economy continues to show signs of further deterioration as the German factory orders reading for December confirms. These fell -2.1% m/m in December against a consensus forecast for a +0.6% rise.”

“The ECB continues to remind investors that their monetary policy toolbox is nearly empty. The ECB president declared that this ‘low interest rate and low inflation environment has significantly reduced the scope for the ECB and other central banks worldwide to ease monetary policy in the face of an economic downturn’.”

“We think the 1.0980/90 support zone in EUR/USD may not hold much longer. A solid US employment reading tomorrow could easily send the pair below 1.0950 to put a test of the early October (multiyear) low at 1.0879 into view.”