German Trade Balance Ahead!
The EUR/USD closed at $1.2171 after placing a high of $1.2196 and a low of $1.2163. EUR/USD pair reversed its course on Tuesday and posted minor losses for the day amid the comeback in the U.S. dollar and dismal European macroeconomic data release. The U.S. dollar was onboard solid after the investors were waiting cautiously to release the U.S. CPI report scheduled for Thursday. Investors believed that it could trigger a tapering of monetary stimulus by the Federal Reserve that could be beneficial for the dollar; hence greenback gathered strength over prospects of tapering and added further losses in the EUR/USD pair.
The U.S. Dollar Index that measures the dollar's value against its rival major six currencies rose about 0.2% on Tuesday. At the same time, the U.S. Treasury yields on the 10-year note fell to their lowest level of the month at 1.51%.
On the data front, at 10:55 GMT, the German Industrial Production from April declined to -1.0% against the expected 0.3% and weighed on single currency Euro and added loss in EUR/USD pair. At 11:45 GMT, the French Trade Balance also dropped to -6.2B against the projected -5.3 and weighed on the single currency Euro and further dragged the currency pair lower. At 13:00 GMT, the Italian Retail Sales from April also dropped to -0.4% against the expected 0.2% and weighed on Euro.
At 14:00 GMT, the ZEW Economic Sentiment fell to 81.3 against the projected 85.8 and weighed on Euro and added further downward momentum in EUR/USD pair. The German ZEW Economic Sentiment also remained depressed at 79.8 against the predicted 86.0 and weighed on Euro and added loss in EUR/USD pair. The Final Employment Change for the quarter remained flat at -0.3%. The Revised GDP for the quarter rose to -0.3% from the forecasted -0.6% and supported Euro and caped further loss in EUR/USD pair.
From the U.S. side, at 0:00 GMT, the Consumer Credit from April declined to 18.6B against the expected 19.5B and weighed on the U.S. dollar and caped further losses in EUR/USD pair. At 15:00 GMT, the NFIB Small Business Index declined to 99.6 against the projected 101.2 and weighed on the U.S. dollar and limited the decline in EUR/USD prices. At 17:30 GMT, the Trade Balance from April remained flat with projections of -68.9B. At 19:00 GMT, the JOLTS Job Openings rose in April to 9.29M from the predicted 9.18M and supported the U.S. dollar, which added further decline in the EUR/USD pair. The ZEW Economic Sentiment fell short of the expectations in June from both Germany as well as the whole of Europe. It indicated weak economic health that made the single currency Euro vulnerable against the U.S. dollar, adding further loss in the EUR/USD currency pair on Tuesday.
EURUSD Intraday Technical Levels
Support Resistance
1.2158 1.2191
1.2145 1.2209
1.2126 1.2223
Pivot point: 1.2177
EUR/USD - Technical Outlook
The EUR/USD is trading sideways between a narrow trading range of 1.2198 – 1.2163 level at the 1.2174 level. The EUR/USD pair holds below 50 EMA resistance area of 1.2184 level on the four hourly timeframes. The closing of candles below this level is supporting a selling bias in the EUR/USD pair. The EUR/USD's next support holds around the 1.2160 and 1.2149 mark on the lower side. Conversely, the pair's resistance holds around 1.2201 and 1.2225 levels. On the news front, eyes will remain on the German Trade Balance due to be released during the European session. Economists expect a negative figure, which may weigh on the EUR/USD pair today. All the best!
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