- Global growth concerns boosted the dollar on Tuesday.
- Eurozone business activity contracted more rapidly than initially projected last month.
- Investor confidence in the Eurozone dipped beyond expectations at the beginning of September.
Today’s EUR/USD price analysis is bearish. Global growth concerns boosted the dollar on Tuesday. Consequently, the Euro fell to its lowest point in nearly three months. Notably, China’s Caixin services PMI hit levels not seen since widespread lockdowns in the country. This added to a series of weak data points from the world’s second-largest economy.
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Additionally, data revealed that eurozone business activity contracted more rapidly than initially projected last month.
Meanwhile, data on Monday showed Investor confidence in the Eurozone dipped beyond expectations at the beginning of September. Germany’s economic frailty continued to weigh heavily on the region, as indicated by a survey on Monday.
Sentix’s eurozone index for September dropped to -21.5 points from August’s -18.9, falling short of the -20.0 estimate. Sentix Managing Director Manfred Huebner highlighted the precarious situation in Germany. Huebner described it as the weakest since July 2020, when the economy grappled with the initial coronavirus lockdown.
Moreover, Huebner stressed that Germany’s struggles adversely affected the broader Eurozone economy.
Additionally, the sub-index for future expectations in the Eurozone fell to -21.0 points from -17.3 the previous month. In comparison, the current situation index plummeted to -22.0 points, marking its lowest level since November 2022.
Specifically addressing Germany, Huebner attributed the deepening recession to a “complete lack of economic competence in the political leadership” and the uncertainties created by the energy and electricity crisis.
EUR/USD key events today
Investors do not expect major news releases from the US or the euro area. Therefore, they will keep digesting the data from China.
EUR/USD technical price analysis: 1.0775 support cracks as euro bears persist.
On the charts, the EUR/USD has broken below the 1.0775 support level as bears continue showing their strength. Bears have consistently made strong candles, while bulls have made smaller and weaker candles.
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Moreover, the price is pushing far below the 30-SMA, showing commitment to the downtrend. The RSI also supports the bearish bias, trading below the 50-mark. The next target for bears is at 1.0725 support. If bulls return at any point, they will likely retest the 1.0775 key level before the bearish move continues.
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Saqib Iqbal
