EUR/USD plummets to monthly lows, below 1.1300 handle on dismal Euro-zone PMIs
• Disappointing EZ PMI prints prompt some aggressive selling.
• Investors scale back expectations for an ECB rate hike in 2019.
• A follow-through technical selling remains a distinct possibility.
The EUR/USD pair finally broke below the 1.1300 handle and tumbled to fresh monthly lows in a knee-jerk reaction to dismal Euro-zone PMI prints.
According to the flash readings, French PMIs drifted into contraction territory for the first time in over two-years and German manufacturing PMI dropped to 33-months in December. Adding to the disappointment, the composite Euro-zone PMI fell to a fresh 49-month low level of 51.3 in December.
Today's data reaffirmed a dovish shift by the ECB President Mario Draghi during the post-meeting press conference on Thursday, forcing investors to scale back expectations for a rate hike next year, and prompted some aggressive selling around the shared currency.
According to the Euro-zone money market futures, investors are now pricing in roughly 60% probability for the ECB to hike rates next year, which marks a heavy drop from around 75% probability seen yesterday after the ECB meeting.
With today's fall, the pair finally seems to have confirmed a near-term bearish breakdown and hence, a follow-through weakness, led by some fresh technical selling, remains a distinct possibility.
Technical levels to watch
Today Last Price: 1.1292
Today Daily change: -72 pips
Today Daily change %: -0.634%
Today Daily Open: 1.1364
Previous Daily SMA20: 1.1365
Previous Daily SMA50: 1.1403
Previous Daily SMA100: 1.1501
Previous Daily SMA200: 1.1723
Previous Daily High: 1.1394
Previous Daily Low: 1.1331
Previous Weekly High: 1.1424
Previous Weekly Low: 1.1311
Previous Monthly High: 1.15
Previous Monthly Low: 1.1216
Previous Daily Fibonacci 38.2%: 1.1355
Previous Daily Fibonacci 61.8%: 1.137
Previous Daily Pivot Point S1: 1.1332
Previous Daily Pivot Point S2: 1.13
Previous Daily Pivot Point S3: 1.127
Previous Daily Pivot Point R1: 1.1395
Previous Daily Pivot Point R2: 1.1426
Previous Daily Pivot Point R3: 1.1457