EUR/USD May Fall on Eurozone Consumer Confidence Data

April 06, 2020

EUR/USD May Fall on Eurozone Consumer Confidence Data

EUR/JPY, CORONAVIRUS, EUROZONE CONSUMER CONFIDENCE DATA – TALKING POINTS

Euro may fall if consumer confidence data spooks markets
Eurozone facing deep recession as coronavirus spreads
EUR/USD broke key support, may resume prior downtrend

ASIA-PACIFIC RECAP

US equity futures pointed higher heading into Asia’s Monday trading session after reports showed coronavirus deaths from countries with the highest infected rates slowed. Meanwhile, Brent plunged over nine percent after tensions between Russia and Saudi Arabia resurfaced over the weekend. US President Donald Trump’s Coronavirus Task Force held a press conference but markets appeared unphased by the content of it.

EURO MAY FALL ON EUROZONE CONSUMER CONFIDENCE DATA

The Euro may face selling pressure if Eurozone Sentix Consumer Confidence data for April underwhelms and reinforces concern about a deep regional recession. Estimates are currently pegged at -37.5, significantly below the prior -17.1 print. If the actual data falls in line with the forecast, it would market softest reading since the 2008 financial crisis.

Data out of the Eurozone has been drastically underperforming relative to economists’ expectations amid the unprecedented virus-induced disruption. Eurozone finance ministers will be meeting on Tuesday to discuss measures to combat the virus, though political deliberations may weigh on the Euro. Consequently, the importance of the event could reduce volatility elicited from the confidence data.

EUR/USD TECHNICAL ANALYSIS

EUR/USD is approaching a floor at 1.0783 after it broke below a key support range that may be the catalyst behind a resumption of the prior steep downtrend. A compression zone between that floor and potential resistance (labelled as “Downtrend Alpha”) may be forming and could accelerate a selloff if it caps EUR/USD’s gains.

EUR/USD – Daily Chart