EUR/USD registers an inside day ahead of German Zew survey
|- The EUR/USD market has turned indecisive, according to Monday's inside day candle.
- Monday's candlestick pattern has made today's close pivotal.
- A bullish close could be seen if the German Zew Survey blows past expectations.
EUR/USD created an inside day or inside bar candlestick pattern on Monday, indicating investor indecision and impending volatility.
An inside day occurs when the price action falls within the preceding day's high and low. On Monday, the currency pair hit a high and low of 1.1043 and 1.1013, respectively, and the trading range fell within Friday's high and low of 1.1063 and 1.1001.
Monday's candlestick pattern has taken the shine off the bullish breakout signaled by Friday's upside break of the trendline connecting June 25 and Aug. 13 highs and has made Tuesday's close pivotal.
A close above 1.1043 (Monday's high) would imply a continuation of the rally from recent lows near 1.0879. On the other hand, a close below Monday's low of 1.1043 would imply an end of the recovery rally.
Focus on the German Zew Survey
The German Zew Survey – Economic Sentiment (Oct), due at 09:00 GMT, is forecasted to print at -27.3 versus -22.5 in September.
Meanwhile, the Current Situation is expected to come in at -26, marking a deterioration from September's -19.9 reading.
A weaker-than-expected data would bolster German recession fears, possibly leading to a sustained drop in the common currency below 1.1013.
A big beat on expectations could put a strong bid under the common currency. However, a bullish daily close may remain elusive if the markets turn risk-averse in response to the dismal China producer price index data released in the Asian trading hours.
Technical levels
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