EUR/USD Analysis: upside capped by key Fibonacci resistance
EUR/USD Current price: 1.1103
- EU data disappointed, core inflation fell by 0.6% YoY in July.
- Germany reportedly preparing to introduce fiscal stimulus.
- EUR/USD range bound, bearish below the 1.1065 support.
The EUR/USD pair is trading marginally higher in a quiet Monday, currently hovering around the 1.1100 figure. The week kick-started with a moderated optimistic mood on the back of the latest US-China headlines, as on Friday, US President Trump said that there was “progress” in talks. There’s no much to cheer about anyway, as a solution is far from sight, and economic growth keeps deteriorating worldwide.
The EU released its Current Account data early London, which showed that the adjusted current account surplus narrowed to 18.4B euros in June from 30.3B in May. Also, July inflation was much worse-than-anticipated, down by 0.5% MoM and up by just 1.0% YoY in July. The core yearly CPI came in at -0.6% against a 0.3% advance anticipated by the market. The bad news were offset by news indicating that Germany is reportedly preparing to introduce fiscal stimulus measures as a contingency in the event of a crisis. There are no macroeconomic releases scheduled in the US today.
EUR/USD short-term technical outlook
The EUR/USD pair has completed a pullback to the 61.8% retracement of its latest daily advance at around 1.1110, still the main resistance. In the 4 hours chart, the 20 SMA keeps heading lower, a handful of pips above the mentioned Fibonacci level, while technical indicators head nowhere within negative levels. The pair is confined to a 30 pips’ range ever since the day started, and seems unlikely it will manage to achieve directional momentum through the upcoming US session.
Support levels: 1.1065 1.1025 1.0980
Resistance levels: 1.1110 1.1160 1.1195
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.
