- EUR/USD consolidates below trendline resistance at 1.1750 ahead of the German Ifo Business Climate from the Ifo Institute.
- German Final GDP for the quarter rose to 1.6% against the predicted 1.5%, adding further gains to EUR/USD.
- Forex trading market participants may look to sell trades below the $ 1.1750 level today.
The EUR/USD closed at $1.1753 after reaching a high of $1.1766 and a low of $1.1726. The pair extended its upward trend and rose for a third consecutive session on Tuesday as it continued its recovery from multi-month low levels. The EUR/USD consolidates below trendline resistance at 1.1750 ahead of the German Ifo Business Climate from the Ifo Institute.
If you are interested in trading EUR/USD with forex robots, check out our guide.
A weaker US dollar underpins the EUR/USD.
The main driver behind the rising prices of the EUR/USD currency pair was the weak US dollar across the board. The US Dollar Index (DXY) dropped on Tuesday and reached below 93 levels after falling more than 0.10% for a day. Whereas, the US Treasury Yields on the 10-year note rose and gained 1.29%, giving some support to the US dollar.
The full approval of the Pfizer and BioNTech vaccine by the US Food and Drug Administration kept the Treasury Yields higher on board. Therefore, traders started hoping that it would result in an economic recovery.
On the contrary, the US Dollar Index remained under pressure for the third consecutive session. The concerns about economic recovery are driven by the rising spread of the Delta variant of the coronavirus.
The US economic data was disrupted a little in August as compared to recent previous months. Therefore, investors started to lose hope that the Federal Reserve might not announce tapering monetary stimulus. Consequently, we saw a bearish trend in the greenback.
Quick Economic Events Review
On the data front, at 11:00 GMT, the German Final GDP for the quarter rose to 1.6% against the predicted 1.5%, adding further gains to EUR/USD.
From the US side, at 18:59 GMT, the Richmond Manufacturing Index in August fell to 9 against the anticipated 25 and weighed on the US dollar.
At 19:00 GMT, in July, the new home sales advanced to 708K against the predicted 698K and capped further gains in the EUR/USD pair.
Fed Chair Jerome Powell to Speak at Jackson Hole Symposium
Investors are now keenly awaiting the speech of Fed Chair Jerome Powell that will follow the Jackson Hole symposium meeting on Friday. Federal Reserve Bank of Kansas City arranges the event, and officials from central bankers attend this meeting.
Moreover, European investors will be waiting for the release of the European Central Bank’s Monetary Policy Meeting Accounts. These are scheduled to be released on Thursday. It seems like the European economy also lost some of its momentum towards economic recovery in August as the data was disrupted. However, according to preliminary published data, the eurozone economy was on track for third-quarter solid growth.
German Ifo Business Climate from Ifo Institute
The Ifo Institute is due to release the German Ifo Business Climate with a forecast of 100.2 versus 100.8 beforehand. Therefore, the EUR/USD may face a slight downward pressure upon the release of a weaker than the forecasted figure.
EUR/USD Price Forecast – Daily Technical Levels
Support Resistance
1.1730 1.1770
1.1709 1.1787
1.1691 1.1809
Pivot Point: 1.1784
EUR/USD Technical Analysis: Eyes on the German Ifo Business Climate
The EUR/USD price forecast remains bearish on Wednesday as the pair refused to go below the 1.1750 resistance mark. On the upper side, the next resistance stays at the 1.1751 mark. Similarly, a continuation of the bullish could lead the pair towards the 1.1805 and 1.1854 marks.
On the 4-hour chart, the downward trendline provides resistance and has the potential to push the pair lower towards $1.1700. Therefore, the formation of candles under this supports level adds strong chances of a selling trend continuation.
The EUR/USD pair has achieved support at the 1.1706 mark that’s prolonged by a 50 day EMA (Exponential Moving Average – Red Line). On the other hand, the oscillator indicator Stochastic RSI is still in the bullish zone. Therefore, we should wait for the RSI to cross below the 50 level before entering any sell trade.
Therefore, Forex trading market participants may look to sell trades below the $ 1.1750 level today. The initial targets are likely to be at $ 1.1706 and $ 1.1650 levels. Alternatively, buy trades can be taken above the $ 1.1751 level to target $ 1.1805 and 1.1854. All the best!
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