EUR/USD daily chart with support and resistance lines on it. Click to enlarge:
- German Final CPI: Tuesday, 6:00. Investors are interested in inflation levels in Germany, the eurozone’s largest economy. The initial reading for German CPI came in at 0.5%, and the second reading is expected to confirm this forecast.
- German ZEW Economic Sentiment: Tuesday, 9:00. This key confidence indicator has dropped sharply and slipped to -24.5 in July, slightly below the forecast of -22.1. Another decline is expected in August, with an estimate of -27.8. The eurozone indicator came in at -20.3 in July and the estimate for August is -21.7.
- German Preliminary GDP: Wednesday, 6:00. The Germany economy grew by 0.4% in the first quarter, matching the estimate. It looks to be a different story in Q2, with an initial estimate of 0.1%.
- French Final CPI: Wednesday, 6:45. Inflation remains weak in the eurozone’s second-largest economy and posted a gain of 0.2% in June. The markets are braced for a decline of 0.2% in July.
- Eurozone Flash GDP: Wednesday, 9:00. The eurozone economy grew by 0.2% in Q1, according to the initial estimate in July. The second estimate is expected to confirm this gain.
EUR/USD Technical analysis
Technical lines from top to bottom:
We start with resistance at 1.1621. This line has held since the first week in October.
1.1515 was a high point at the end of January. 1.1435 was a low point at the beginning of February.
1.1390 was a stepping stone on the way up in late January and capped EUR/USD earlier.
1.1345 is next. 1.1290 has held in resistance since the first week of July.
Close by, 1.1270 was a double-bottom in December 2018.
1.1215 (mentioned last week) is the next resistance line.
1.1119 switched to support early in the week as EUR/USD posted strong gains.
1.1025 was a cap back in May 2017.
1.0950 is next.
1.0829 has held in support since April 2017. It is the final support level for now.
I remain bearish on EUR/USD
The eurozone economy remains weak, and key indicators are predicting a soft second quarter for Germany, the largest economy in the eurozone. With global trade tensions escalating, there could be some headwinds ahead for the euro.
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Further reading:
-
- GBP/USD forecast – Pound/dollar predictions
- USD/JPY forecast – analysis for dollar/yen
- AUD/USD forecast – the outlook for the Aussie dollar.
- USD/CAD forecast – Canadian dollar predictions
- Forex weekly forecast – Outlook for the major events of the week.
Safe trading!