- EUR/USD fell sharply on Monday, neutralizing the immediate bullish outlook.
- A below-forecast German Zew survey will likely accentuate bearish pressures around the EUR.
- The bulls need a break above trendline sloping lower from June highs.
Also, market chatter regarding the possibility of US tariffs on European Union's (EU) goods seemingly added to the bearish pressures around the EUR.
On the defensive
Monday's drop poured cold water optimism generated by Thursday's bullish engulfing candle. Put simply, the immediate bullish outlook has been neutralized and a break above the descending trendline connecting June 25 and Aug. 6 highs is needed to put the bulls in a commanding position.
Focus on German ZEW
The ZEW survey – Economic Sentiment (Sep) is expected to print at -37.00 vs -44.1 in August. Meanwhile, the ZEW survey – Current Situation (Sep) is seen printing at -15.00, having printed at -13.5 in August.
A big beat on expectations is needed to alleviate German recession fears and lift EUR/USD to levels above the falling trendline resistance, currently at 1.1087.
A modest bounce is unlikely to yield big gains in the EUR, while a weaker-than-expected print will likely pave the way for a retest of recent lows near 1.0927.
The bearish pressures would further strengthen if the geopolitical tensions in the middle east escalate, leading to increased demand for Treasuries and the US Dollar. As of writing, the pair is trading at 1.1012, representing marginal gains on the day.
|Today last price||1.1012|
|Today Daily Change||0.0009|
|Today Daily Change %||0.08|
|Today daily open||1.1003|
|Previous Daily High||1.1084|
|Previous Daily Low||1.0993|
|Previous Weekly High||1.111|
|Previous Weekly Low||1.0927|
|Previous Monthly High||1.1251|
|Previous Monthly Low||1.0962|
|Daily Fibonacci 38.2%||1.1028|
|Daily Fibonacci 61.8%||1.105|
|Daily Pivot Point S1||1.097|
|Daily Pivot Point S2||1.0936|
|Daily Pivot Point S3||1.0878|
|Daily Pivot Point R1||1.1061|
|Daily Pivot Point R2||1.1118|
|Daily Pivot Point R3||1.1152|
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