EUR/USD Current Price: 1.0137

  • The German ZEW Survey showed that Economic Sentiment fell sharply in August.
  • Market players maintain a cautious stance amid signs of a global economic setback.
  • EUR/USD trades at the lower end of its monthly range and near a critical Fibonacci support.

The EUR/USD pair extended its weekly decline to 1.0121, a fresh August low. The greenback remains strong as investors maintain the focus on recession-related fears. Tepid European data added to the EUR's weakness, as the EU June Trade Balance posted a seasonally adjusted deficit of € 30.8 billion. Also, the German ZEW Survey showed that the Economic Sentiment in the country plunged to -55.3 in August, while the sentiment for the whole Union declined to -54.9.

Meanwhile, stock markets are on pause. Asian indexes posted modest losses while EU ones are marginally higher, none far from their opening levels. US Treasury yields, on the other hand, ticked higher but remain within familiar levels.

Ahead of Wall Street’s opening, the US released July Building Permits, which declined by 1.3% MoM, while Housing Starts in the same period were down a whopping 9.6%. The greenback lost some steam after the news but holds near its daily highs against most major rivals.

EUR/USD short-term technical outlook

From a technical point of view, the daily chart for EUR/USD supports another leg lower, as the Momentum indicator heads firmly lower within negative levels, while the RSI indicator decelerated its slide but is still pointing south within negative levels. At the same time, the pair extends its slide below a mildly bullish 20 SMA, now converging with a Fibonacci resistance level at 1.0205.

The 4-hour chart also shows that the risk is skewed to the downside, as the pair has fallen further below all of its moving averages, as the 20 SMA accelerates its decline above the longer ones. Technical indicators, in the meantime, maintain their downward slopes within negative levels. The 23.6% retracement of the latest daily slide provides support at 1.0105, with a break below the level opening the door for a retest of parity.

 Support levels: 1.0105 1.0070 1.0020

Resistance levels: 1.0160 1.0205 1.0240

View Live Chart for the EUR/USD

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