German ifo Business Climate In Focus
After hitting a high of $1.1766 and a low of $1.1726, the EUR/USD ended the day at $1.1753. On Tuesday, the EUR/USD resumed its upward movement, rising for the third straight session as it recovered from multi-month lows. The key driver of the EUR/USD pair's price rise was weakening the U.S. dollar across the board. The U.S. Dollar Index (DXY) fell below 93 points on Tuesday after plunging more than 0.10 percent in a single day. On the other hand, 10-year Treasury yields increased to 1.29 percent on Tuesday, providing modest support to the U.S. currency.
The rising market optimism following the explicit permission of the Pfizer and BioNTech vaccination by the U.S. Food and Drug Administration maintained Treasury Yields higher on Wednesday. Investors began to hope for an economic revival. On the other hand, he has been under stress for the third straight session, owing to fears about economic recovery fueled by the spread of the Delta version of the coronavirus.
Additionally, the U.S. Dollar Index fell as investors lost faith that the Federal Reserve would not announce monetary stimulus tapering because economic data was a little erratic in August compared to recent months. On the statistics front, the German Final GDP for the quarter jumped to 1.6 percent at 11:00 GMT, beating expectations of 1.5 percent, bolstering the single currency Euro, which added to the EUR/USD gains.
The Richmond Manufacturing Index plummeted to 9 against the expected 25 at 18:59 GMT, weighing on the U.S. dollar, which helped further gains in EUR/USD. At 19:00 GMT, New Home Sales in July increased to 708K, up from 698K expected, bolstering the U.S. dollar and capping further increases in the EUR/USD currency pair.
Investors are now eagerly anticipating Fed Chair Jerome Powell's address, which will occur after the Jackson Hole symposium meeting. On the European front, European markets will be looking forward to releasing the ECB Monetary Policy Meeting reports on Thursday. As the data came in jumbled, it appears that the European economy lacked some of its momentum toward recovery in August. On the other hand, the European economy appeared to be on course for solid third-quarter growth, according to preliminary figures.
EUR/USD Intraday Technical Levels
Support Resistance
1.1730 1.1770
1.1709 1.1787
1.1691 1.1809
Pivot Point: 1.1784
EUR/USD - Technical Outlook
The EUR/USD hasn't changed much on the technical front as it's trading at 1.1734 with a slight bearish bias. In the 4-hour timeframe, the EUR/USD pair's immediate support prevails at the 1.1727 level. At the same time, the intraday pivot point is extending resistance at 1.1749 level. Therefore, the EUR/USD's immediate resistance stays at the 1.1749 level, and a bullish breakout of this level exposes the pair towards 1.1766 and 1.1787 levels.
The pair may find support around the 1.1720 level and a bearish break below 1.1720 exposes the pair towards the 1.1708 level. Overall, the pair isn't forming a higher high and higher low pattern anymore. Therefore, the upward trend in the EUR/USD pair seems weaker. The selling trend dominated the market on Wednesday especially below 1.1749.
Investors' primary focus will stay on the German ifo Business Climate as this could drive price action during today's European session. All the best!
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