Germany is reportedly ready to take on new debt to counter recession. Eurozone trade surplus narrows less than expected in June. US Dollar Index looks to post weekly gain of more than 1%. The shared currency struggled to find demand this week following the disappointing macroeconomic data releases and turned south after posting small recovery gains on Monday. After touching to its lowest level in more than two weeks at 1.1066 earlier today, the pair recovered a large portion of its daily losses but struggled to hold above the 1.11 mark. As of writing, the pair was down 0.08% on the day at 1.1097. If the pair ends the week below 1.11, it will erase more than 100 pips for the week and record its lowest weekly close since April 2017. Gloomy outlook to force ECB to act Earlier this week, Germany’s Destatis in its preliminary report announced that the German economy contracted by 0.1% on a quarterly basis in the second quarter, reviving concerns over an economic slowdown throughout Europe and forcing investors to start pricing an aggressive action by the European Central Bank (ECB). In fact, in an interview with The Wall Street Journal, ECB policymaker Olli Rehn said the bank’s package of stimulus measures, which will be announced in September, could overshoot investors’ expectations and argued that it was better to overshoot on stimulus rather than undershoot. Although German magazine Der Spiegel today wrote that the German government was standing ready to discard its balanced budget and take on new debt to battle a possible recession, the positive impact of this article on the shared currency was short-lived. Meanwhile, the data published by the Eurostat showed that the euro area trade surplus narrowed to â‚¬20.6 billion in June to beat the market expectation for a surplus of â‚¬16.3 billion but did little to nothing to help the euro. On the other hand, the US Dollar Index extended its recovery above the 98 mark today and advanced to its highest level since August 2 at 98.34 to further weigh on the pair. Although the index pulled away slightly from its highs, it still remains on track to end the week with a gain of more than 1%. The only data from the US today showed that the consumer confidence in August deteriorated amid the uncertainty surrounding the Trump administration’s trade policy to limit the Greenback’s gains against its major rivals. Technical outlook via FXStreet Chief Analyst Valeria Bednarik The long-term trend is bearish for the EUR/USD pair, as, in the weekly chart, it faltered around a mild-bearish 20 SMA, which remains below the larger one. Technical indicators in the mentioned chart have retreated from around their midlines, and while still within familiar levels, for sure indicate that bears have the control. Adding to the bearish case, the pair is below the 61.8% retracement of the recovery measured from 1.1026 to 1.1249. Daily basis, the pair is technically bearish, as it has fallen for four consecutive days, after repeatedly failing to surpass its 100 DMA, now developing also below a bearish 20 SMA. Technical indicators head sharply lower within negative levels but far from oversold levels, in line with further slides ahead. The yearly low at 1.1026 is the immediate target at 1.1026, with a break below it opening doors for a test of 1.0960/80. The pair could recover after piercing for the first time the psychological 1.1000 figure, but if it fails to recover sharply, 1.0860 comes as the next bearish target. Resistances next week, came at 1.1160, 1.1220 and the high set this August at 1.1250. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next NY Fed’s GDP Nowcast improves to 1.8% for Q3 from 1.6% FX Street 3 years Germany is reportedly ready to take on new debt to counter recession. Eurozone trade surplus narrows less than expected in June. US Dollar Index looks to post weekly gain of more than 1%. The shared currency struggled to find demand this week following the disappointing macroeconomic data releases and turned south after posting small recovery gains on Monday. After touching to its lowest level in more than two weeks at 1.1066 earlier today, the pair recovered a large portion of its daily losses but struggled to hold above the 1.11 mark. 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