EUR/USD Analysis: bears taking over ahead of ECB
|EUR/USD Current price: 1.1002
- German’s economy seen into a technical recession in Q3.
- US data beat expectations, with inflation up at factory levels.
- EUR/USD could accelerate its decline once below a Fibonacci support at 1.0980.
The EUR/USD pair is flirting with the 1.1000 level, trading at its lowest for this week. The greenback is trading within familiar levels against most of its major rivals, while the common currency has suffered a setback from news related to Germany. The country could reportedly face a shortfall in tax revenue in the next two years, despite deciding to stick to its zero-deficit policy in its 2020 budget. Growth in the country was downgraded by the German Kiel Institute for the World Economy, to 0.4% from 0.6% previously. The organism, also sees the economy falling into a technical recession in Q3, forecasting a -0.3% GDP.
The US released today MBA Mortgages Applications for the week ended September 6, which rose by 2.0% following a 3.1% decline. The Producer Price Index for August rose by 0.1% monthly basis and by 1.8% from a year earlier, beating the market’s expectations. The core readings were up by 0.2% and 2.3% respectively. Pending of release in the US, is the Wholesale Inventories report for July.
EUR/USD short-term technical outlook
The EUR/USD pair briefly pierced the 1.1000 figure, now stuck around it ahead of the US opening, with Wall Street poised to follow its overseas counterparts in its way up. The 4 hours chart for the pair indicates that bears are taking over it, as it’s now developing below all of its moving averages, and more relevantly, below the 38.2% retracement of its latest daily decline, after faltering around the 61.8% retracement late last week. Technical indicators in the mentioned time-frame stand in negative ground, gaining bearish strength. The next Fibonacci support comes at 1.0980, with a break below it favoring a retest of the yearly low.
Support levels: 1.0980 1.0955 1.0920
Resistance levels: 1.1030 1.1075 1.1110
View Live chart for the EUR/USD
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