Heading into the North-American session, analysts at TD Securities (TDS) provided key highlights of Monday’s trading action and also offered a brief preview of the US new home sales data.
“Risk appetite remains under pressure as the newsflow surrounding the coronavirus outbreak continues to deteriorate, as we expected. Today’s disappointing IFO reading has not helped matters, keeping EUR – and sentiment in general – under pressure. We think the recent EURUSD downtrend can extend a bit further toward the key 1.0980/90 pivot. A significant and sustained move below there puts us onto a more bearish near-term footing but that might be hard to achieve ahead of the week’s key risk event, Wednesday’s FOMC meeting.”
“Today’s main data release will be US new home sales, however, markets are likely to be focusing on coronavirus developments. We expect new home sales to end 2019 on a strong note, rising to 735k in Dec from 730k in Nov. If realized, this would be the highest level for new home sales since 2007 and would continue to add to the positive momentum in housing activity.”