EUR/USD slid to its lowest level in nearly two weeks and faced the prospect of more losses as the slow drip of weak economic news kept Europe's currency under pressure. A huge downside miss to German December industrial orders highlighted risks that growth in core euro zone economies is stumbling and could be nearing a recession. Italian wire service ANSA reported that the European Commission is ready to cut its forecast for Italian 2019 GDP growth to 0.2 percent from November's prediction of 1.2 percent Click here.
Further pressure comes from an MNI report citing sources saying that the ECB could adjust its rate guidance if economic data continues its surprisingly weak performance.
The downside factors have widened Italian-German spreads while Euribor futures prices are rallying.
The Euribor rally now suggests the ECB's first full 25 basis point hike won't occur until the end of 2020.
As a result EUR/USD has broken 1.1390/1.1400 support, which coincides with the daily cloud top, 55-DMA and January 28 low.
Monthly and daily RSIs also suggest lower levels are due.
The daily cloud base at 1.1358 will provide some support but a test of bigger support near 1.1290/1.1300 seems likely.
chart: Click here