EUR/USD price sinks 4.5% in Q4 as investors turn to German indicators
Eurozone's fate hangs on German data impact on EUR/USD trajectory
The fourth quarter of 2024 has been challenging for the euro. EUR/USD started the week in a continued downtrend, shedding another 0.6% and hitting a fresh 30-week low. Since October, the pair has tumbled over 4.5% and is settling around 1.0630 in today’s European session. This decline brings EUR/USD within striking distance of the 1.0600 support level, a threshold last breached in April which now serves as a critical marker for euro sentiment.
Given such substantial declines, the focus now shifts to whether upcoming data from Germany, the largest eurozone economy will break this bearish streak or fuel further downside momentum. This data including the German ZEW Economic Sentiment and the Final CPI m/m reports are on the radar, and given Germany’s significant role in the Eurozone, any shifts in sentiment or inflation could weigh heavily on EUR/USD’s trajectory.
Impact of German indicators on EUR/USD outlook
The ZEW Economic Sentiment report will gauge the outlook of German institutional investors and analysts, revealing their six-month forecast on economic conditions. A reading above 13.2 could inject optimism, giving EUR/USD a boost. Conversely, a softer reading would amplify concerns about Europe’s economic health, pressuring the Euro further. Similarly, if the Final CPI comes in above the 0.4% forecast, it could stir some bullish action for the euro. However, if inflation weakens, the bearish tone on EUR/USD might deepen as it signals a slower recovery in Germany’s consumer sector.
The 1.0600 level could become a key battleground for EUR/USD in the coming days. If this support level breaks, it would open doors for even deeper declines, to multi-year lows. On the other hand, holding above 1.0600 might signal some resilience, especially if upcoming German data surprises on the upside.
German political turmoil pushes EUR/USD prices to multi-month lows. This reflects growing worries about Europe’s economic trajectory and political terrain
