- A survey revealed a second consecutive monthly deterioration in German business morale.
- Eurozone business growth came to a virtual halt in June.
- US business activity experienced a decline in June.
Today’s EUR/USD outlook is bearish. The Euro declined against the dollar following a survey that revealed a second consecutive monthly deterioration in German business morale. This suggests that Europe’s largest economy faces challenges in recovering from a recession.
–Are you interested in learning more about Canada forex brokers? Check our detailed guide-
Notably, the business climate index of the Ifo Institute declined from 91.5 in May to 88.5 this month, as reported by the institute. On the other hand, analysts surveyed by Reuters had anticipated a smaller decrease to 90.7 in June.
Clemens Fuest, the president of Ifo, remarked that sentiment in the German economy has noticeably worsened.
Additionally, data released on Friday indicated that Eurozone business growth came to a virtual halt in June. This was due to a deepening manufacturing downturn and sluggish expansion in the dominant services industry.
Elsewhere, the lingering concerns about extended monetary tightening cycles by major central banks contributed to some safe-haven support for the dollar index.
According to Carol Kong, a currency strategist at the Commonwealth Bank of Australia, the aggressive monetary tightening in major economies will likely lead to further deterioration in the global economy. Furthermore, she mentioned that this factor would support the safe-haven status of the US dollar.
In June, US business activity experienced a decline to a three-month low, and the contraction in the manufacturing sector deepened. However, the overall picture suggested a slight improvement in economic growth during the second quarter.
Finally, traders closely monitored developments in Russia. An aborted mutiny raised doubts about President Vladimir Putin’s control.
EUR/USD key events today
It will be a mostly quiet session for the EUR/USD as investors are not expecting high-impact economic releases from the US or the Eurozone today.
EUR/USD technical outlook: Rebound pauses at the 1.0900 resistance.
On the 4-hour chart, the price has pulled back and retested the 1.0900 resistance level. This follows a rapid collapse that saw the price break below the 30-SMA support to reverse the trend. The bias has gone from bullish to bearish, with the price now below the 30-SMA and the RSI below 50.
–Are you interested in learning more about social trading platforms? Check our detailed guide-
If the 1.0900 resistance holds firm, bears will resume the new downtrend by retesting the 1.0851 support level. Furthermore, a break below this support will see bears retest the 1.0775 support level.
Looking to trade forex now? Invest at eToro!
68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money