EUR/USD’s range play continues ahead of Eurozone Consumer Confidence

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  • EUR/USD remains directionless despite the drop in the US treasury yields. 
  • An above-forecast Eurozone Consumer Confidence will likely push the pair higher to the trendline falling from June highs. 

EUR/USD’s struggle for a clear directional bias continues despite the pullback in the US treasury yields and ahead of the Eurozone Consumer Confidence data. 

The currency pair is currently trading at 1.1058, representing moderate gains on the day. Notably, the common currency is trapped in a narrowing price range between 1.10-1.11 since Sept. 16 despite the US 10-year treasury yield’s drop from 1.907% to 1.75%. 

Focus on Eurozone data

Eurozone’s preliminary Consumer Confidence index for September, scheduled for release at 14:00 GMT, is expected to come in at -7, having printed at -7.1 in August. 

A weaker-than-expected data would validate the European Central Bank’s (ECB) recent decision to dole out fresh stimulus and could push the EUR lower. 

The pair may challenge resistance of the trendline connecting June 26 and Aug. 13 highs if the consumer confidence beats estimates with a positive print. As of writing, the trendline resistance is located at 1.1083. 

The technical outlook, however, would turn bullish if and when the pair violates the bearish lower highs set up with a daily close above Sept. 13’s high of 1.1110. 

German Producer Price Index due at 06:00 GMT may be ignored by markets, as factory slowdown is generally accepted by now and priced in. 

Technical levels

 

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