Daily Price Outlook
The EUR/USD currency pair has managed to sustain its upward momentum, hovering around the 1.0934 level. However, the resurgence in this pair can be attributed to the release of upbeat Eurozone data, shedding light on the improved performance of the European economy. This positive economic outlook has acted as a catalyst, bolstering the Euro (EUR) and subsequently contributing to the overall strength of the EUR/USD currency pair.
Conversely, the bullish US dollar played a major role in putting a cap on the EUR/USD currency pair's further gains. The US dollar's bullish performance was fueled by the impressive retail sales figures. These numbers showed strong consumer spending, which in turn provides a substantial lift to the entire economy. This upbeat economic scenario has given rise to expectations of potential interest rate hikes by the Federal Reserve. As a result, investors are finding the dollar more attractive, potentially leading to even greater strength in its value.
Eurozone Industrial Production Rebounds, Minimal Impact on EUR/USD Pair
According to the latest official data, Eurozone Industrial Production was pleasantly surprised by showing an unexpected increase in June, signifying a revival in the manufacturing sector's progress. The monthly growth of 0.5% surpassed forecasts of a -0.1% contraction, while the annual dip of 1.2% in June was notably smaller compared to May's 2.5% decline, outperforming the anticipated 4.2% drop. These statistics had a mild effect on the EUR/USD pair, which is presently trading around 1.0930, displaying a 0.22% increase for the day.
Eurozone's Steady Growth and Positive Employment Change Bolster EUR/USD Confidence
Furthermore, the Eurozone's economy grew 0.3% in Q2 2023, meeting estimates and maintaining the same pace as Q1. The annual GDP rate was 0.6% for both quarters, in line with predictions. Meanwhile, Employment Change data for Q2 revealed a 0.2% increase quarterly and a 1.5% rise yearly.
Thus, the consistent 0.6% annual GDP rate in both quarters, along with the positive Employment Change data, reinforces confidence. This news has supported EUR/USD, which is trading at 1.0928, showing a 0.21% increase for the day.
EUR/USD - Technical analysis
The EUR/USD pair exhibited a bearish rebound upon encountering the initial significant resistance at 1.0955, signaling an intent to continue its corrective downward trajectory. A breach of the 1.0880 mark is crucial to pave the way for our subsequent target at 1.0785.
Given these dynamics, the prevailing outlook remains bearish for the forthcoming period, further reinforced by the negative momentum implied by the EMA50.
It's noteworthy that surpassing the 1.0955 level, followed by the 1.1030 threshold, would nullify the anticipated decline, steering the pair back toward a primary bullish trend.
Today, we foresee a trading spectrum with a floor at 1.0820 and a ceiling at 1.0970.
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