EUR/USD analysis: slowing EU growth keeps hurting the shared currency

Valeria Bednarik FXStreet

EUR/USD Current Price: 1.1277

German IFO survey showed consumer confidence fell further in April.
Consumer Sentiment also deteriorated in the US, fueling concerns about a possible recession.

The EUR/USD pair edged lower Tuesday, despite the dollar, and in general safe-haven assets, were off investors' radar. The common currency attempted a rally that was contained by a selling interest around weekly highs, also by worse-than-expected German data, as the IFO Consumer Confidence Survey for April came in at 10.4, missing the market's expectations, while March reading was downwardly revised to 10.7 from 10.8. The decline was moderated by mixed US data, as, in February, Housing Starts, fell by 8.7% when compared to the previous month, much better than the -28.3% expected. Building Permits in the same month decreased by 1.6%, worse than the market's forecast of -0.6%. January readings for both were revised lower. The Richmond Fed Manufacturing Index printed 10 in March, down from the previous 16 and the expected 12, while the CB Consumer Confidence Index unexpectedly dropped to 124.1 points in March from 131.4 in February, with the subcomponents of current situation and expectations both sharply down, reflecting arising concerns about a possible recession in the US.

ECB's Draghi is scheduled to speak this Wednesday, alongside a couple of other central bank representatives, although no surprises about the future of monetary policy are expected. The US will release the January Trade Balance with the deficit foreseen at $57.0B, better than the previous one at $59.8B.

The pair settled around the 61.8% retracement of the latest bullish run at around 1.1280, with a clear bearish stance in the short-term, as, in the 4 hours chart, the pair is now developing below all of its moving averages, with the 20 SMA crossing below the larger ones, all of them around the 50% retracement of the same rally. Technical indicators in the mentioned chart remain within negative territory, with the Momentum losing downward strength after an upward corrective movement than anyway stalled below its 100 line while the RSI grinds lower, currently at 37. Further declines toward the yearly low at 1.1175 seem likely for the upcoming sessions, particularly if the greenback becomes more attractive for speculators.

Support levels: 1.1265 1.1220 1.1175

Resistance levels: 1.1320 1.1350 1.1390

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Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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