- EUR/USD faded an overnight spike above the 200-hour MA in Asia.
- Risk-off continues to bode well for the US dollar, a global reserve currency.
- Eurozone's Industrial Production is forecasted to have contracted by 0.2% in February.
- Trump to announce new guidelines for reopening the economy on Thursday.
After facing rejection at the 100-hour average hurdle during Wednesday's American trading hours, EUR/USD fell below the 200-hour average at 1.0896 in Asia and is now trading in the red near 1.0875.
Risk-off
The market remains focused on prospects of global economic recession due to coronavirus pandemic and continues to shun risk, as evidenced by the 0.50% decline in the futures tied to the S&P 500. Asian stocks, too, have come under pressure. For instance, Japan's Nikkei index is flashing a 1.6% drop at press time.
Meanwhile, investors continue to treat the US dollar, a global reserve currency, as a haven asset. The pandemic is forcing investors to accumulate cash, preferably in the form of the greenback.
Eyes Eurozone data
The official data due at 09:00 GMT is expected to show that Eurozone's industrial production contracted by 0.2% month-on-month in February. Markets are now worried about extended lockdowns leading to a deeper economic slowdown than previously forecasted and are unlikely to react to data for the month of February.
German Consumer Price Index for March, due at 06:00 GMT, could also turn out to be a non-event for the single currency.
The American dollar may run into offers during the US trading hours if President Trump surprises markets by announces guidelines for an early reopening of the economy at a news conference on Thursday. "We have passed the peak on new cases and it's very exciting," Trump told his daily news briefing on Wednesday.
The pair may also take cues from the weekly US employment data scheduled for release at 12:30 GMT.
Technical levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY remains below 158.00 after Japanese data
Soft US Dollar demand helps the Japanese Yen to trim part of its recent losses, with USD/JPY changing hands around 157.70. Higher than anticipated Tokyo inflation passed unnoticed.
AUD/USD weakens to near 0.6200 amid thin trading
The AUD/USD pair remains on the defensive around 0.6215 during the early Asian session on Friday. The incoming Donald Trump administration is expected to boost growth and lift inflation, supporting the US Dollar (USD). The markets are likely to be quiet ahead of next week’s New Year holiday.
Gold depreciates amid light trading, downside seems limited due to safe-haven demand
Gold edges lower amid thin trading following the Christmas holiday, trading near $2,630 during the Asian session on Friday. However, the safe-haven asset could find upward support as markets anticipate signals regarding the United States economy under the incoming Trump administration and the Fed’s interest rate outlook for 2025.
Floki DAO floats liquidity provisioning for a Floki ETP in Europe
Floki DAO — the organization that manages the memecoin Floki — has proposed allocating a portion of its treasury to an asset manager in a bid to launch an exchange-traded product (ETP) in Europe, allowing institutional investors to gain exposure to the memecoin.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.