FX.co ★ The rate of decline: where the euro will "land"

The European currency is showing a decline, and analysts find it difficult to answer how strong and long it will be. The impulse of this fall was yesterday's negative data on the industrial sector in Germany.

Experts consider protracted trade conflicts to be the reason for the "subsidence" of German statistics. Recall that the German economy is very strongly tied to Chinese demand, and the escalation of the trade war disrupted the traditional supply chain. This has had an extremely negative impact on Europe's leading economy, analysts emphasize.

Weak statistics from Germany had negatively affected global stock markets and raised the fears of investors. As a result, the market froze in suspense, and the European currency began to decline. On Monday, September 23, the EUR / USD pair fell 0.4%, reaching a minimum of 1.0973. A number of market players believe that the pair may approach 1.1000.

However, experts do not lose hope for a further recovery of the EUR / USD pair. Currently, it is trading in the range of 1.0988–1.0993. Last week, the pair tried to break through the resistance level of 1.1071. Now, experts are recording a gradual change in trend from downward to upward. It is possible that in the coming week, the level at 1.10715 will be overcome and there will be a movement towards the target levels of 1.11450 and 1.12155. In the case of updating the support level of 1.0968, a new downward trend will form with a decrease to 1.0835, analysts warn.

Currently, experts note positive signals indicating the recovery of the EUR / USD pair. This gives the market hope for a possible change in the monetary policy of Germany. Germany previously assumed the likelihood of fiscal stimulus, and it is possible that the German authorities will take appropriate measures in the near future.

On Tuesday, September 24, market participants are waiting for the IFO report, which presents the dynamics of the German business climate index. If the statistics published in this report are "soft", like the country's monetary policy, this will help restore the German economy and reduce negative market sentiment. However, while fiscal stimulus measures have not been announced, the movement of the EUR / USD pair remains downward, with the possibility of a breakdown of 1.0900 and a further fall, experts conclude.