EUR/USD analysis: bears in the driver seat
|EUR/USD Current Price: 1.1208
- German economic sentiment fell further in July amid trade tensions, Brexit uncertainty.
- US Retail Sales resulted upbeat in July, up monthly basis by 0.4%.
- EUR/USD on its way to retest the yearly low at 1.1106.
The EUR/USD pair has fallen to 1.1201 this Tuesday, to finish the day a couple of pips above it. The shared currency came under selling pressure following the release of the German ZEW survey, which showed that Economic Sentiment in the country fell to -24.5 in July, worse than the -22.3 expected. The report blames the pessimistic sentiment on the Iran conflict, the trade dispute between the US and China, and Brexit uncertainty. The Economic Sentiment for the whole Union fell by less-than-anticipated, coming in at -20.3 vs. the previous -20.2. Also, comments from ECB’s member, Francois Villeroy, affected the EUR as he said that policymakers will asses economic data in their next week’s meeting, and act accordingly if and when is needed, adding that monetary policy cannot repair the potential damage of protectionist measures. The greenback, on the other hand, found support on better-than-expected US Retail Sales, which rose by 0.4% in June, much better than the 0.1% anticipated, while the core reading, Retail Sales Control Group increased by 0.7% vs. the 0.3% expected.
This Wednesday, the EU will release June inflation data, with the CPI seen up by 1.2% YoY, and the core yearly reading expected at 1.1%. The US will release June Housing Starts and Building Permits, both seen recovery after May’s decline.
EUR/USD short-term technical outlook
The EUR/USD pair broke below the 23.6% retracement of the latest daily decline after failing to surpass the 38.2% retracement of the same slide in the last few days, heading into the Asian session trading a few pips above July’s low at 1.1181, now the immediate support. In the 4 hours chart, the pair is currently developing below all of its moving averages, with the 20 SMA turning bearish below the larger moving averages in the 1.1250 region. Technical indicators have lost their bearish strength but hold around their daily lows, also near oversold levels. A break through the mentioned monthly low should open doors for a retest of the year bottom at 1.1106, while the bearish pressure could ease on a recovery above 1.1245, the mentioned Fibonacci resistance.
Support levels: 1.1180 1.1150 1.1110
Resistance levels: 1.1245 1.1280 1.1310
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