The single European currency faced a number of difficult questions. It has repeatedly declined over several trading sessions, but now, it is necessary to stop, take a breath and begin a gradual rise. However, experts believe that this is hardly possible in the near future.
A prolonged fall in the euro is in the spotlight of the currency markets. On Thursday, September 26, most of the world's leading currencies strengthened against the US dollar, but the "European" was an exception. Its collapse began shortly after the opening of the American market, and by the end of the European session, the process gained momentum.
Even a strong IFO report on Germany, reflecting the country's business climate index, could not contain the fall of the euro. In addition, the European currency was not supported by the growth of the GFK consumer confidence index in Germany. These two positive economic factors passed by the "European".
Experts are sure that the EUR / USD pair can be supported by the launch of budgetary incentives from the German regulator. However, Berlin has not yet decided on these measures. In such a situation, the probability of EUR / USD falling to the level of 1.0800 increases significantly, analysts warn.
Moreover, more pessimistic forecast for the single European currency is the assumption by experts of the largest Japanese bank MUFG. Experts are sure that it can fall to a critical level of 1.0500. This is possible in case of breakdown of the level at 1.0926, emphasize in MUFG.
On Thursday, September 26, the euro was trading at around 1.0944, and before that, the EUR / USD pair declined to 1.0923. Experts consider this indicator the weakest since mid-2017. MUFG believes that conflicting economic data and an unstable news background on both sides of the Atlantic play against the European currency. The strengthening of the American currency also contributes to the weakening of the "European", analysts emphasize. "Cherry on the cake", which put the bandwagon on the euro, was weak data on the eurozone economy, which raised concerns about the inevitable recession, while economic data in the US exceeded the expectations of the market.
According to MUFG's forecasts, the EUR / USD pair will be at the level of 1.0700 by the end of the year. Experts believe that the pair is moving towards the middle of the "bear" channel. Currently, the EUR / USD pair is trading in the range 1.0916–1.0922. The "bearish" trend in relation to the euro has reached a new low since the beginning of this year, experts sum up.
