EUR/USD Current price: 1.1181
- Growth in Germany contracted in the second quarter of the year.
- EU Industrial Production plunged in June, exacerbating concerns about economic growth.
- EUR/USD bearish case gaining strength, although confirmation still needed.
The EUR/USD pair is trading within familiar levels between 1.1160 and 1.1200, unable to attract investors as bad news came from both shores of the Atlantic. As expected, growth in Germany contracted in the second quarter of the year, with the preliminary estimate of Q2 GDP resulting at -0.1%. For the entire Union Q2 GDP resulted at 0.2%, also meeting the market´s forecast. Additionally, Industrial Production in the Union fell by more-than-anticipated in June, down by 1.6% MoM and decreasing by 2.6% YoY.
The greenback was not affected by data, but by an inversion of the yield-curve triggering fears of a recession. Equities are sharply down, alongside bonds yields, with the market rushing back into safe-haven assets. Wall Street is set to open lower and seems poised to erase Tuesday’s recovery.
EUR/USD short-term technical outlook
The EUR/USD pair is neutral-to-bearish according to the 4 hours chart, trading within descending moving averages, and with technical indicators directionless below their midlines. The 1.1160 region continues to attract buyers. The pair has there the 38.2% retracement of its latest bullish run, and a break below it would likely signal a downward extension in the following sessions. The pair is far from the 1.1249 high set last week, with bulls taking over only on a break above it.
Support levels: 1.1160 1.1125 1.1080
Resistance levels: 1.1220 1.1250 1.1285
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