- EUR/USD consolidates around the 1.1440s region, extending its losses to three days in a row.
- EUR/USD printed a year-to-date low around 1.1430.
- UoM Consumer Sentiment Index fell to 66.3, its lowest reading since November 2011.
EUR/USD barely declines during the day, consolidating around 1.1446, down some 0.01% at the time of writing. The shared currency has failed to gain traction against the greenback, which has remained bid during the Asian and the European session, gaining follow-through as the New York session begins.
Furthermore, the single currency downfall has extended for three days, printing year-to-date new lows in each of those days. In fact, earlier in the New York session, it reached a new yearly low at 1.1432, a level not seen since July 2020. At press time, the euro is consolidating around the 1.1440s region as we get ahead into the weekend.
University of Michigan Consumer Sentiment Index drop overshadowed EU Industrial Production expansion
On the macroeconomic front, the Eurozone economic docket featured the Industrial Production for September, which increased by 5.2%, higher than the 4.1% foreseen, reported by Eurostat.
Across the pond, the University of Michigan Consumer Sentiment Index for November fell to 66.8, lower than the 71.7 number in October, marking the lowest reading since November 2011.
Richard Curtin, the chief economist of Surveys of Consumers, said that “consumer sentiment fell in early November to its lowest level in a decade due to an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation.”
According to Societe Generale analysts in a note to clients noted that “the euro will fall as a result” of difference between the US and Europan inflation threats. Further added that “the US faces a bigger and more demand-led inflation spike that cries out for tighter monetary policy, while in Europe it does not.” This cemented ECB dovishness postures, expressed by ECB top officials like President Christine Lagarde and ECB’s chief economist Philip Lane, who pushed back higher interest rates, saying that inflation is temporary and would moderate later in 2022.
EUR/USD Price Forecast: Technical outlook
The single currency continues sliding in the week, and if the trend accelerates, it could slide as low as 1.1255, the July 10, 2020 low, but it would find some hurdles on the way south. The first support would be June 10, 2020, high at 1.1423, followed by 1.1300, and the target mentioned above at 1.1255.