EURUSD reversed course and fell to its lowest level in two weeks near 1.1050.
After EURUSD rise around 1.1100 during Asian trading hours on Tuesday. EURUSD reversed course and fell to its lowest level in two weeks near 1.1050. A four-hour closing below that level might attract more selling. And pave the stage for the pair to continue falling.
Although the favorable move in risk sentiment helped the Euro remain robust versus the US Dollar (USD) earlier in the day. Germany’s poor business confidence data forced the currency to face fresh selling pressure.
According to the IFO Institute’s monthly study, The German Business Climate Index fell to 87.3 in July from 88.6 in June. This figure was lower than the market forecast of 88.00.
The IFO surveys head, Klaus Wohlrabe, told Reuters. That the German Gross Domestic Product (GDP) expect to contract in the third quarter. Following Monday’s poor PMI readings from Germany and the Eurozone. The IFO data fueled recession worries ahead of Thursday’s European Central Bank (ECB) policy decisions.
The CB Consumer Confidence Index data for July will be included on the US economic docket.
The Conference Board will issue the July US Consumer Confidence Index statistics in the afternoon. Investors should avoid taking significant positions based on this data. Especially because the Federal Reserve’s interest rate decision is coming up.
Futures contracts on US stock indexes are traded. The European session was mixed. Google Alphabet and Microsoft will report second-quarter profits. After Wall Street closes. A cautious market approach may help the USD maintain its position and weigh on the pair during American business hours.
EURUSD Technical Analysis
EURUSD is trading within striking distance of 1.1050, the Fibonacci 50% retracement of the most recent rise. If the pair falls below that level and begins to use it as a barrier, more losses might be anticipated approaching 1.1000 (psychological level, Fibonacci 61.8% retracement) and 1.0980 (200-period SMA).
On the upswing, the 100-period SMA creates initial resistance at 1.1070, with 1.1100 (Fibonacci 38.2% retracement) being the next target. A daily close below the latter might discourage sellers and pave the way for a prolonged rally.
