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FxWirePro: Bulls likely to push euro higher in short-term

The single currency is down this week, and today heading lower after dismal German data showing that growth rate declined to lowest in five years. The data from Federal Statistics office showed that GDP grew by 1.8 percent in 2018, compared to 2.2 percent growth in 2017. The fear that Eurozone’s main growth engine is slowing down, pushed the euro to 1.143 as of now, right after the currency reached the highest level since October 2018.

Despite the decline, our calculations suggest that in the short term, bulls might push the single currency higher, as Brexit news would continue to hit the market over the coming days and weeks. More news expected after today’s voting in the UK’s House of Commons on Prime Minister Theresa May’s Brexit agreement, reached with the European Union.

Even if the deal fails to pass through the parliament, the euro can still move higher on positive follow-ups by the lawmakers both in the UK and the European Union.

While we are forecasting the euro higher in the short term, our longer-term call is on the bearish side, which was entered around 1.218 area. Over the longer horizon, we expect the euro to decline towards 1.09 area.

The stop loss for short-term trade should be kept around 1.127 area. 

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