EUR/USD steadies near mid-1.15s, looks to close fifth straight day lower
|- Factory orders contract 4% in Germany in June.
- Investor confidence in the eurozone improves slightly.
- US Dollar Index consolidates daily gains above 95.
The EUR/USD pair spent the Asian in a tight range near the 1.1560 handle but came under a renewed selling pressure during the European trading hours as the data from Germany missed market expectations by a wide margin. After touching its lowest level in five weeks at 1.1530, the pair retraced the majority of its daily losses in the NA session and was last seen trading at 1.1555, where it was down 0.1% on the day.
The data released by the Deutsche Bundesbank on Monday revealed that factory orders contracted by 4% on a monthly basis in June following May's 2.6% expansion and fell short of analysts' estimate of -0.4%. Commenting on the data, the new drop in orders in July, indicates that the weakness in production has continued moving into Q3. Besides the drop in orders in June, earlier published surveys for July had also signalled ongoing weakness in Germany’s manufacturing sector." said Aline Schuiling, Senior Economist at ABN AMRO.
On the other hand, the eurozone Investor Confidence Index released by the Sentix GmbH improved to 14.7 in August from 12.1 in July to surpass the market expectation of 13.5, but failed did little to nothing to help the shared currency retrace its losses.
In the second half of the day, the greenback lost its bullish momentum and allowed the pair stage a modest recovery. The US Dollar Index, which advanced to its best level in more than a month at 95.52, was at 95.35, up 0.2%, at the time of press.
Tuesday's macroeconomic calendar will feature industrial production and trade balance figures from Germany. If tomorrow's numbers disappoint, the euro could come under a renewed selling pressure. JOLTS Job Openings and IBD/TIPP Economic Optimism from the U.S. will be looked upon for fresh impetus during the NA session.
Technical outlook
With today's fall, the pair remains on track to record its fifth straight daily close in the red. The RSI indicator on the daily chart stays below the 50 mark, suggesting that sellers remain in control of the price action. On the downside, the pair could face the initial support at 1.1530 (daily low) ahead of 1.1500 (psychological level) and 1.1470 (Jul. 18, 2017, low). On the upside, resistances align at 1.1610 (Aug. 3 high), 1.1660 (20-DMA) and 1.1740 (Jul. 26/Jul. 25/Jul. 23 high).
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