EUR/USD Current Price: 1.0210
- Softer-than-anticipated Chinese data undermined the market mood.
- Stocks struggle to post gains while government bond yields pressure their recent highs.
- EUR/USD is technically bearish in the near term, with support in the 1.0150 price zone.
The American dollar is in recovery mode at the beginning of the week, appreciating across the FX board. The EUR/USD pair trades around the 1.0200 threshold, not far from a daily low of 1.0185. Renewed recession concerns overshadowed inflation-related relief amid signs of slowing economic activity in China. Retail Sales in the country were up 2.7% YoY in July, while Industrial Production rose by 3.8% in the same period, both missing the market’s expectations. At the same time, the central bank unexpectedly cut a key policy interest rate and drained liquidity.
Stock markets struggle to post gains, with European indexes trading mixed at around their opening levels. Demand for US government bonds, on the other hand, is keeping yields at the upper end of their latest range, reflecting fears of an economic setback.
Data-wise, Germany published the July Wholesale Price Index, which fell by 0.4% MoM. The US released the August NY Empire State Manufacturing Index, unexpectedly contracting to -31.3 from 11.1 in the previous month. The figure put some pressure on the greenback ahead of Wall Street’s opening. The calendar will remain light for the rest of the day.
EUR/USD short-term technical outlook
The EUR/USD pair is down for a second consecutive day, and technical readings show an increased risk of a bearish breakout. The daily chart shows that the Momentum indicator seesaws around its midline but also that the RSI indicator has accelerated south, maintaining its bearish slope at around 46. Meanwhile, the pair is crossing below a now flat 20 SMA, while the longer ones keep heading lower, far above the current level.
The near-term picture is bearish. The 4-hour chart shows that technical indicators have extended their declines within negative levels, maintaining their downward slopes. Also, the price is currently developing below all of its moving averages, with the 100 and 200 SMA lacking directional strength and converging at around 1.0210. Further declines could be expected should the pair be below the 1.0150 price zone.
Support levels: 1.0155 1.0105 1.0070
Resistance levels: 1.0240 1.0280 1.0325
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD holds firm above 1.0700 ahead of German inflation data
EUR/USD trades on a firm footing above 1.0700 early Monday. The pair stays underpinned by a softer US Dollar, courtesy of the USD/JPY sell-off and a risk-friendly market environment. Germany's inflation data is next in focus.
USD/JPY recovers after testing 155.00 on likely Japanese intervention
USD/JPY is recovering ground after crashing to 155.00 on what seemed like a Japanese FX intervention. The Yen tumbled in early trades amid news that Japan's PM lost 3 key seats in the by-election. Holiday-thinned trading exaggerates the USD/JPY price action.
Gold price bulls move to the sidelines as focus shifts to the crucial FOMC policy meeting
Gold price struggles to capitalize on its modest gains registered over the past two trading days and edges lower on the first day of a new week, albeit the downside remains cushioned.
Ripple CTO shares take on ETHgate controversy, XRP holders await SEC opposition brief filing
Ripple loses all gains from the past seven days, trading at $0.50 early on Monday. XRP holders have their eyes peeled for the Securities and Exchange Commission filing of opposition brief to Ripple’s motion to strike expert testimony.
Week ahead: FOMC and jobs data in sight
May kicks off with the Federal Open Market Committee meeting and will be one to watch, scheduled to make the airwaves on Wednesday. It’s pretty much a sealed deal for a no-change decision at this week’s meeting.