More and more evidence is stacking up to suggest that the Euro Zone stumbled over the line at the end of last year. Eurozone confidence faltered to its lowest levels in 23 months yesterday, and this was followed by the slide in Germany’s industrial output in the morning. For Germany, it would appear that the writing could be on the wall for a technical recession as the automotive sector weakens alongside the headwinds presented by the global trade war. For the ECB (and the Euro), ministers could be feeling that they can’t catch a break. Having finally ended its asset purchase program in December and signaling that it could dip its toes into a tightening phase for monetary policy, things could be set on hold if the headwinds hitting Europe are significant enough.
This morning though the EUR/USD pair is trading at 1.1451, representing an increase of 0.11 percent. For now, the Euro has some headwinds such as ignoring Brexit, the Italy-EU budget farce, France’s yellow vest protests, and the Merkel succession. On the flip side, market technicians from important investment banks are showing that the Euro might have a bounce of over 1.1500 during this year.