The euro managed to record a slight strengthening against the US dollar supported by poor US economic data. Launch of Bloomberg, the EUR / USD currency pair edged up 0.53% to the level of 1.0939.
Monex Investindo Futures Faisyal analysts assess the strengthening of the EUR / USD is limited thanks to market speculation about the interest rate cuts that will be carried out by the Fed related to coronavirus outbreaks that spread widely to various countries. As a result, US bond yields also fell.
The 10-year US government bond yield fell to a record low of 1.29%. "While there is still speculation of a Fed rate cut that has weakened the US dollar," Faisal on Thursday (2/27).
Also, the policies are taken by the German government stimulated the movement of the euro today. "The German finance minister said that he was considering reducing restrictions on fiscal reductions to sustain regional governance and the economy as a whole," he said.
German Economy Strengthens, Estimates Can Hit the Dollar
Besides, the euro also strengthened after the release of solid German economic data this week, as IFO data released earlier this week were better than expected. Especially if US data later that night, including durable goods orders which are expected to fall by 1.5% in February, will likely hit the dollar.
Global Kapital Investama analyst Alwi Assegaf added, the positive trend of the movement of the EUR will continue in tomorrow's trading from a technical perspective.
The current price has moved above the MA 20 indicating a bullish short-term trend. The RSI indicator has moved above 50, showing buyers are starting to dominate, as well as a bullish crossover stochastic, supporting further gains. MACD Negative, but is starting to show a bullish divergence.
For tomorrow's trade, Faisal has put sell recommendations with support at 1.0770 and 1.0830 while resistance is at 1.0980 and 1.1030. While Alwi put buy recommendations with support at the levels of 1.0775 and 1.08501 while the resistance was at the levels of 1.0990 and 1.1065.
Global Kapital Investama analyst, Alwi Assegaf rate, limited movement of the EUR / AUD pair is inseparable from the fundamental conditions of each country that tends to be depressed. Alwi sees the euro is currently inseparable from the issue of economic slowdown, which is marked by the possibility of a slowdown in Germany, the country with the largest economy in the European region.
Strengthening of the Dollar, EUR / AUD Moves Sideways
"However, the release of data yesterday showed German business sentiment was better than expected. IFO data showed an increase to 96.1 in February from the previous month 96.0, against expectations of a 95.0 decline. The data successfully lifted euro sentiment in the last two days, "Alwi said.
Another sentiment that can suppress the euro comes from European monetary policy which still needs accommodative policies until the end of the year. While Australia's conditions are also not much different. The land of kangaroos is also in an unfavorable condition after China is hit by a coronavirus outbreak.
"Corona hit China's economy and Australia which made China as the biggest trading partner was affected. "The emergence of signals of a slowdown in the Chinese economy has become a negative sentiment for the Aussie currency lately," explained Alwi, Tuesday (25/2).
Alwi added Goldman Sachs had also lowered the projected growth of Australia's economy in 2020 from 2.4% to 2.1%. Besides, the possibility of the Reserve Bank of Australia to cut interest rates also adds to the negative sentiment for the Australian dollar.
"With this condition, it is recommended to sell on strength. For tomorrow, EUR / AUD will be at support levels of 1.6315 and 1.6227 while resistance levels are at 1.6467 and 1.6591, "Alwi said.
