- EUR/USD is lacking a clear directional bias ahead of the German trade data.
- Weaker-than-expected German imports may hurt the EUR.
- The downside could be limited as prominent analysts believe an impending dovish response by the ECB has been priced in.
EUR/USD is sidelined around the 10-day moving average (MA) of 1.1027, having failed to close above that MA line in the last two trading days.
The German data due at 06:00GMT is expected to show the exports or outbound shipments dropped 0.5% month-on-month in July, following a 0.1% decline in June. Meanwhile, imports or inbound shipments are seen contracting 0.3% in July, having risen by 0.5% in June.
Germany's Trade Balance s.a. (Jul) is forecasted to drop to €17.5B from €18.1B.
A drop in exports wouldn't be a surprise. After all, Germany's manufacturing Purchasing Managers' Index (PMI) had dropped to a seven-year low in July, primarily due to the steepest drop in export orders since 2009.
The EUR, however, may come under pressure if the German imports drop more than expected aggravating worries of a deeper slowdown in the Eurozone's manufacturing powerhouse. Weak imports would mean a broader consumption slowdown.
Note that the European Central Bank is expected to cut rates and announce another round of bond-buying on Thursday. The dovish expectations would only strengthen with a weak German data if any.
That said, the analysts at Goldman Sachs believe there is little downside in the EUR around the ECB rate decision and have reportedly squared off a short position in the EUR/JPY pair.
Put simply, the markets may have done pricing a dovish ECB and the losses due to dismal German data could be muted.
|Today last price||1.1027|
|Today Daily Change||-0.0002|
|Today Daily Change %||-0.02|
|Today daily open||1.1029|
|Previous Daily High||1.1057|
|Previous Daily Low||1.102|
|Previous Weekly High||1.1085|
|Previous Weekly Low||1.0926|
|Previous Monthly High||1.1251|
|Previous Monthly Low||1.0962|
|Daily Fibonacci 38.2%||1.1034|
|Daily Fibonacci 61.8%||1.1043|
|Daily Pivot Point S1||1.1014|
|Daily Pivot Point S2||1.0999|
|Daily Pivot Point S3||1.0977|
|Daily Pivot Point R1||1.1051|
|Daily Pivot Point R2||1.1073|
|Daily Pivot Point R3||1.1088|
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.