- On Tuesday, the EUR/USD is trading with a neutral bias at the 1.1876 level as an upward channel supported it.
- Germany’s ZEW Indicator of Economic Sentiment fell 13.9 points to a new reading of 26.5 points.
- Forex trading market participants may look for a buy trade above 1.1861 with an initial target of $1.1888 and $1.1931 levels.
On Tuesday, the EUR/USD is trading with a neutral bias at the 1.1876 level as an upward channel supported it. The day before, the EUR/USD pair ended at $1.1868, having reached a high of $1.1888 and a low of $1.1855. The EUR/USD reversed their course after rising continuously for the previous six consecutive days. The EUR/USD, on the other hand, is facing a headwind due to lower-than-expected German ZEW Economic Sentiment.
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After the US dollar gathered little strength, the currency pair EUR/USD faced some pressure and turned red for the day. However, the losses were limited due to fewer investors as the US markets were closed for the holiday. The currency pair EUR/USD remained defensive after a goodish pickup in the greenback demand.
The Euro currency was also under pressure ahead of the European Central bank meeting on Thursday. Furthermore, the German Factory Orders report failed to impress the euro traders and did little to lend any support that kept the EUR.USD currency pair under pressure for the day.
Quick Economic Events Update
There was no report from the US side on the data front, so the currency pair left with the data released from the European side on Monday. At 11:00 GMT, the German Factory Orders from July surged to 3.4% against the forecasted -0.9%. It supported the single currency Euro and limited the decline in EUR.USD currency pair.
At 13:30 GMT, the Sentix Investor Confidence for September rose to 19.6 against the predicted 18.3 and supported the single currency Euro. The data from Europe suggested that the recovery in the manufacturing sector of Europe’s economic powerhouse was gaining momentum.
European Central Bank Meeting, Expectations & Investor’s Sentiment
Although the expectations for reducing PEPP during the upcoming ECB meeting are high, the euro currency still faces pressure from thin trading conditions. The cautious behavior of investors ahead of the meeting. The European Central Bank will announce its interest rate decision and release the monetary policy statement on Thursday. Furthermore, on Tuesday, Eurostat will release the gross domestic product growth figures for the Q2 of 2021.
The expectations are set as the economy will contract by 0.6% every quarter, and any figure showing more contraction could harm the euro, and any figure showing less contraction could support the euro.
German ZEW Economic Sentiment Triggers Euro Selling Bias
The ZEW (Zentrum fur Europaische Wirtschaftsforschung) has released the German ZEW Economic Sentiment for the Eurozone. In the September 2021 poll, Germany’s ZEW Indicator of Economic Sentiment fell 13.9 points to a new reading of 26.5 points.
For the fourth time since May 2021, the indicator has decreased. In September 2021, the assessment of Germany’s economic position improved again, now standing at 31.9 points, 2.6 points better than in August 2021. Since February 2021, when it was – 67.2 points, the situation indicator has been steadily rising.
EUR/USD Price Forecast – Daily Technical Levels
Support Resistance
1.1852 1.1885
1.1837 1.1903
1.1820 1.1917
Pivot Point: 1.1870
EUR/USD Price Forecast – Weaker than expected German ZEW Economic Sentiment
The EUR/USD is trading bullish above the 1.1861 support mark. On the 4 hour chart, the breakout of the double top pattern is now operating as a support for the EUR/USD. The formation of candles over the 1.1861 level could drive an additional bullish trend until the 1.1888 resistance level.
The EUR/USD pair is currently trading with a bullish bias at the 1.1868 level as investors are pricing in the weaker than expected German ZEW Economic Sentiment from ZEW. On the downside, the violation of the 1.1861 support level could drive the EUR/USD pair towards the 1.1845 and 1.1802 marks.
The 50 days EMA (Exponential Moving Average – Red Line) is held at 1.1886. Thus, it’s supporting a selling trend in the EUR/USD pair. On the flip side, the oscillator indicator Stochastic RSI holds in an oversold zone, demonstrating that the sellers are getting exhausted; thus, the bulls may enter the market soon.
The Forex trading market participants may look for a buy trade above 1.1861 with an initial target of $1.1888 and $1.1931 levels. Alternatively, sell trades can be taken below the $1.1860 level to target $ 1.1795. All the best!
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