FxWirePro: Euro might drop further as ECB nears-calls included

Though outlook for Dollar is clouded, especially on the upside, Euro seems to be facing larger pressure. As meeting by European Central Bank (ECB) closes in, which is scheduled for 10^th March, Euro is inevitably falling under the spell of expectations of further actions from ECB.

We at FxWirePro fundamental, hasn't been much of a Euro bear after December actions from ECB. Our medium term call reached targets around 1.112, 1.125 and 1.1325, however other two targets hasn't reached yet at 1.145 and 1.15 area.

Even our longer term call matrix is pointing to further gain possibility to as high as 1.20 area, once the resistance around 1.15 gets cleared.

Saying all that, we do recognize, in the very short term pressure is building on Euro as economic dockets have been much weaker.

This PMI reading showed, economic momentum has weakened significantly. Euro Zone Markit manufacturing PMI dropped to 51, lowest reading since January, 2015. Services PMI also declined to 53, again lowest since January, 2015. German manufacturing PMI dropped to 50.2, lowest since December 2014.

Italy's inflation data showed, prices declined by -2.2% y/y In January.

Today's German GDP data showed economy expanded by 1.3% in fourth quarter, which is weakest since first quarter of 2015. IFO data was equally bleak.  Expectations dropped to lowest since October, 2014. Business conditions index dropped to weakest since December, 2014.

With probable ECB actions hanging, weaker economic dockets weighing on Euro.

Trade idea -

Sell Euro against Dollar at current price @1.10 at more at rallies, with stop loss around 1.115 area and target around 1.077 area.