EUR Lower As Growth Fears Weigh on Sentiment

Eurozone Growth FearsThe Euro remains under pressure on Tuesday as the latest set of eurozone economic data adds to bearish sentiment. The ZEW economic sentiment survey for the eurozone slipped further into negative territory at -8.9 today, down from -5.5 the prior month and below the -6.2 the market was looking for. Fears for the health of the eurozone economy have been a key market focus point over recent months. With growth projections sliding, many players are judging that the ECB will soon be forced to side-line its tightening program to avoid severely impacting the economy.Uncertainty Around the ECBThe ECB itself has acknowledged the downside risks facing the eurozone economy but has reaffirmed its commitment to tightening as necessary to tame inflation. Recent ECB commentary has remained mostly hawkish though concerns over the downside impact of current tightening have also been shared. With this in mind, EUR looks likely to trade lower near-term on any further data weakness which will be seen as increasing the chances of the ECB pausing its tightening program sooner rather than later.  ECB in FocusLooking ahead to the upcoming ECB meeting this week, the market is currently forecasting that the ECB will look to pause its tightening program. While risks are still on the hawkish side here, if the ECB does go ahead and pause this should see EUR firmly lower near-term, dependent on the content of the bank’s forward guidance of course.Technical Views EURCADThe sell off in EURCAD had stalled into the initial test of the rising trend line from YTD lows. However, after traveling up the trend line some way, price is now breaking below the trend line and below the 1.4612 level. While below here, the focus is on a further push lower with 1.4460 the next support to note ahead of bigger support at the 1.4240 level.