EUR/USD: On the defensive after biggest single-day drop since July, eyes German data


  • 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. 

EUR/USD fell 0.65% on Monday, the biggest single-day drop since July 1, as the weekend's attack on Saudi's oil production facilities put a haven bid under the greenback. 

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. 

Technical levels

EUR/USD

Overview
Today last price 1.1012
Today Daily Change 0.0009
Today Daily Change % 0.08
Today daily open 1.1003
 
Trends
Daily SMA20 1.1051
Daily SMA50 1.1127
Daily SMA100 1.1183
Daily SMA200 1.1259
Levels
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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