After disappointing German data, the EURUSD struggles to prolong its corrective recovery from a three-month low.
After disappointing German data was released early Wednesday. The EURUSD fell from an intraday high of 1.0730 to 1.0730. Fading the corrective recovery off the lowest level in three months. As a result. The Euro pair struggles to applaud the US Dollar’s retreat over the Old Continent’s recession difficulties vs the prospect of a recovery. A gentle landing for the United States. Nonetheless, the cautious mood ahead of the Eurozone Retail Sales for July. And the US ISM Services PMI for August has recently spurred the pair sellers.
German factory orders fell -11.7% year on year, the highest since the early 2020s.
German factory orders fell the most since April 2020, falling -11.7% year on year, compared to -4.0% projected. And 7.6% revised before. However, monthly statistics fell significantly. At -10.5% vs 3.3% previously (revised from 3.0%).
Eurozone recession worries clash with US soft landing talk to support the Euro(EURUSD) pair’s negative tendency.
The previous day’s Eurozone Producer Price Index (PPI) for July. And the economic concerns expressed in the European Central Bank’s (ECB) monthly poll of consumer inflation expectations may be interpreted in the same way.
It should be emphasized that the US Factory’s positive detailsComments by Federal Reserve (Fed) officials. Protect US Dollar bulls even as rates fall. Allowing Greenback investors to take a respite. On Tuesday. The US Factory Orders for July fell to its lowest level since mid-2020. Showing -2.1% MoM numbers vs -0.1% estimates and 2.3% rise in June. However, orders excluding transportation gained 0.8% MoM. Shipments of products remained solid, and stocks increased for the first time in three months. However, Federal Reserve (Fed) Governor Christopher Waller’s justification of hawkish monetary policy in a CNBC interview. As well as Cleveland Federal Reserve President Loretta Mester’s rejection of rate decreases, favor US Dollar bulls.
Concerns about more support for China’s real estate sector appear to have subsided. According to Chinese media. The property shares were propelled, particularly by Country Garden’s avoidance of default. The same looks to be the major factor challenging the market’s prior risk-off mindset and providing a floor for the EURUSD price.
Against this backdrop, stock futures in the US and Europe print minor losses while tracking Wall Street benchmarks, while the US Dollar Index (DXY) oscillates at 104.80, the highest level since March 15.
Moving forward, more data about the US soft landing and the Eurozone recession will be scrutinized in order to provide clear guidance.
Technical Outlook
A daily close below the March rising support line. Which is now immediate resistance at 1.0790, sends the EURUSD down toward the June low of 1.0635.
