EUR/USD: Rangeplay continues ahead of key German data


  • EUR/USD remains trapped in 1.1250-1.1167 range for the fifth day.
  • The downside has been capped near 1.1167 despite the German yield curve inversion.
  • EUR could take a beating if the German ZEW survey underlines the need for additional monetary easing by the ECB.

EUR/USD is lacking a clear directional bias for the fifth straight day.

The pair charted a Doji candle – a sign of indecision – last Tuesday and has remained trapped largely in a narrow range of 1.1250-1.1167 ever since.

German yield curve inverts

The spread between the German 10-year and three-month Bund yields fell below zero on Aug. 6 and stood at -0.036 basis points on Monday.

Even so, the downside in EUR/USD has been restricted around 1.1167. The EUR's resilience could be associated with the escalating US-China trade tensions, protests in Hong Kong and US-Iran tensions.

After all, the European Central Bank is running a negative interest rate policy and the entire German yield curve is offering negative returns for the first time on record. So, many observers believe the EUR is a funding currency - the one which rises during risk-off and is used to fund purchases of risk assets during improve risk appetite.

So, the EUR could continue to defend 1.1167 if the risk-off worsens. The common currency, however, may pierce the lower edge of the recent trading range if the German data disappoints expectations.

Focus on German data

The ZEW survey scheduled for release at 09:00 GMT is expected to show the Economic Sentiment deteriorated to -30 index points in August from July's reading of -24. Meanwhile, Current Situation is forecasted to drop to -7 from -1.1.

If the ZEW survey matches estimates or print below estimates, then markets may price in greater odds of an aggressive ECB easing in the near term by offering the EUR across the board.

Apart from ZEW data, the EUR pair may also take cues from the German inflation number scheduled for release at 06:00 GMT. In the American session, the focus would shift to the US Consumer Price Index.

Technical levels

EUR/USD

Overview
Today last price 1.1189
Today Daily Change -0.0027
Today Daily Change % -0.24
Today daily open 1.1216
 
Trends
Daily SMA20 1.1174
Daily SMA50 1.1239
Daily SMA100 1.1225
Daily SMA200 1.1296
Levels
Previous Daily High 1.1232
Previous Daily Low 1.1162
Previous Weekly High 1.1251
Previous Weekly Low 1.1104
Previous Monthly High 1.1373
Previous Monthly Low 1.106
Daily Fibonacci 38.2% 1.1205
Daily Fibonacci 61.8% 1.1189
Daily Pivot Point S1 1.1174
Daily Pivot Point S2 1.1134
Daily Pivot Point S3 1.1105
Daily Pivot Point R1 1.1244
Daily Pivot Point R2 1.1272
Daily Pivot Point R3 1.1314

 

 

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